Is it a good company at a reasonable price? I found this an interesting small cap and invested in it. I still find it interesting. It has certainly been able to grow it s Revenue and it is Revenue growth that ultimately can provide for earnings, and dividend growth. A problem is the debt load. The stock price seems relatively cheap.
I own this stock of Stingray Digital Group Inc (TSX-RAY.A, OTC-NONE). I was following Newfoundland Capital Corp and Stingray Bought them out. Also, I read the blub on CEO, Eric Boyko. The site says he is an entrepreneur with nearly two decades of experience with start-ups. Mr. Boyko has extensive expertise in early stage business innovations. The financial year end is March 31 each year, so I am looking at the financial year ending March 31, 2023.
When I was updating my spreadsheet, I noticed I have had this stock for 5 years and so far, it has been a loser. I have a total loss of 7.32% with a capital loss of 11.49T and dividends of 4.17%. This stock was bought with my fooling around money. However, Revenue, Earnings and Dividends are growing so this is a positive.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | 155.17% | 20.61% |
| 5 | AEPS Growth | 58.00% | 9.58% |
| 5 | Net Income Growth | 1211.80% | 67.33% |
| 5 | Cash Flow Growth | 348.54% | 35.01% |
| 5 | Dividend Growth | 50.00% | 8.45% |
| 5 | Stock Price Growth | -43.15% | -10.68% |
| 9 | Revenue Growth | 439.71% | 18.36% |
| 9 | AEPS Growth | 88.10% | 6.52% |
| 9 | Net Income Growth | 246.55% | 13.23% |
| 8 | Cash Flow Growth | 777.56% | 24.26% |
| 7 | Dividend Growth | 215.79% | 12.19% |
| 8 | Stock Price Growth | -18.76% | -2.06% |
If you had invested in this company in December 2014, for $1,000.50 you would have bought 138 shares at $7.25 per share. In December 2022, after 8 years you would have received $258.06 in dividends. The stock would be worth $672.06. Your total return would have been $930.12. This is a total loss of 1.00% per year with a capital loss of 4.85% and dividends of 3.85%.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $7.25 | $1,000.50 | 138 | 8 | $258.06 | $672.06 | $930.12 |
The current dividend yield is good with dividend growth suspended but growth moderate. The current dividend yield is good (5% to 6% ranges) at 5.91%. The 5 year median dividend yield is also good at 5.01%. The 7 year and historical dividend yields are moderate (3% to 4% ranges) at 3.47%. The dividend increase over the past 5 years is moderate (8% to 14% ranges) at 8.45%. However, the last dividend increase was in 2020 and it was for 7.1%.
The most important Dividend Payout Ratios (DPR) are for AEPS and CFPS and they are good. The DPR for 2023 for Earnings per Share (EPS) is 70% with 5 year coverage at 95%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is 38% with 5 year coverage at 38%. The DPR for 2023 for Cash Flow per Share (CFPS) is 20% with 5 year coverage at 23%. The DPR for 2023 for Free Cash Flow (FCF) is 31% with 5 year coverage at 32%. The company has its own version of Free Cash Flow they call Adjusted Free Cash Flow (AFCF) and the DPR for 2023 for AFCF is 70% with 5 year coverage at 95%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 69.77% | 94.67% |
| AEPS | 37.97% | 38.16% |
| AFCF | 69.77% | 94.67% |
| CFPS | 20.28% | 22.72% |
| FCF | 30.73% | 31.55% |
Debt Ratios show that they have too much debt. The Long Term Debt/Market Cap Ratio for 2023 is too high at 0.93 and currently at 1.08, and it is to do with rising debt and fall stock price. The Intangible and Goodwill Ratios are too high also at 1.70 and 1.98, which means these are higher than the market cap. However, they include the Broadcast License and if ignore than they are still high, but better at 0.87 and 1.01. The current one is high at 1.01 because of fall stock price.
The Liquidity Ratio is low at 0.86 and is better at 1.30 if we add in Cash Flow after dividends, but still lower than what I would like which is a ratio of 1.50 or higher. The Debt Ratio is fine at 1.47. The Leverage Debt/Equity Ratios are too high at 3.13 and 2.13. I prefer these below 3.00 and 2.00, respectively.
| Type | Yr End | Ratio Curr. |
|---|---|---|
| Lg Term R | 0.93 | 1.08 |
| Intang/GW | 1.70 | 1.98 |
| Int. less BL | 0.87 | 1.01 |
| Liquidity | 0.86 | 0.86 |
| Liq. + CF | 1.30 | 1.44 |
| Debt Ratio | 1.47 | 1.47 |
| Leverage | 3.13 | 3.13 |
| D/E Ratio | 2.13 | 2.13 |
The Total Return per year is shown below for years of 5 to 8 to the end of 2022. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. | check |
|---|---|---|---|---|---|---|
| 2017 | 5 | 8.45% | -9.39% | -13.26% | 3.87% | -9.39% |
| 2014 | 8 | 13.32% | -1.00% | -4.85% | 3.85% | -1.00% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.58, 13.22 and 16.86. The corresponding 8 year ratios are 15.82, 20.19 and 22.95. The corresponding historical ratios are 15.82, 20.19 and 22.95. The current P/E Ratio is 8.33 based on a stock price of $5.08 and EPS estimate for 2024 of $0.61. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earnings per Share (data). The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 5.22, 7.55 and 10.38. The corresponding 8 year ratios are 8.08, 9.23 and 10.70. The current P/AEPS Ratio is 5.64 based on a stock price of $5.08 and AEPS estimate for 2024 of $0.90. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Free Cash Flow per Share (data). The 5-year low, median, and high median Price/Adjusted Free Cash Flow per Share Ratios are 3.30, 5.41 and 7.01. The corresponding 8 year ratios are 5.45, 6.23 and 7.68. The current P/AFCF Ratio is 4.06 based on a stock price of $5.08 and AFCF for the last 12 months of $1.25. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $9.14. The 8-year low, median, and high median Price/Graham Price Ratios are 0.82, 1.05 and 1.29. The current P/GP Ratio is 0.56 based on a stock price of $5.08. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get an 8-year median Price/Book Value per Share Ratio of 1.92. The current P/B Ratio is 1.23 based on a stock price of $5.08, Book Value of $286M, and Book Value per Share of $4.13. The current ratio is 36% below the 8 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have an estimate for the Book Value in 2024 of $4.45. This estimate implies a Book Value of $309M, and a P/B Ratio of 1.14 based on a stock price of $5.08. This ratio is 41% below the 8 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an 8-year median Price/Cash Flow per Share Ratio of 9.23. The current P/CF Ratio is 3.24 based on a stock price of $5.08, Cash Flow per Share estimate for 2024 of $1.57 and Cash Flow of 4109M. The current ratio is 65% below the 8 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an 8 year and historical median dividend yield of 3.47%. The current dividend yield is 5.91% based on dividends of $0.30 and a stock price of $5.08. The current dividend yield is 70% above the 8 and historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 9-year median Price/Sales (Revenue) Ratio is 1.80. The current P/S Ratio is 1.03 based on Revenue estimate for 2024 of $341M, Revenue per Share of $4.92 and a stock price of $5.08. The current ratio is 43% below the 9 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The dividend tests say this and it is confirmed by the P/S Ratio test. All the tests are pointing to a cheap price.
When I look at analysts’ recommendations, I find Strong Buy (2), and Buy (3) recommendations. The consensus would be a Strong Buy. The 12 months stock price consensus is $7.70. This implies a total return of 43.71% with 37.80% from capital gains and 5.91% from Dividends.
Last analysts wrote on Stock Chase that this stock was on his watch list in February 2021. Stock Chase gives this stock 1 star out of 5. Christopher Liew on Motley Fool thinks this is a stock to watch as it is trading at a bargain price. Christopher Liew on Motley Fool in 2022 thought this was good stock for passive income. The company put out a press release on Global Newswire about their fourth quarter ending March 2023.
Simply Wall Street via Yahoo Finance put out a report on this stock in August 2022. They issued 3 warnings of has a high level of debt; unstable dividend track record; and large one-off items impacting financial results. Their dividends are not unstable, but Simply Wall Street often views dividends paid in CDN$ as unstable because of currency exchange. The reason for using Adjusted Earnings per Share is to deal with large one-off items and this company does that. Simply Wall Street gives this stock 3 and one half stars out of 5.
Stingray Group Inc is a music, media, and technology company. It operates through the following segments namely the Broadcasting and commercial music segment and Radio segment. Its web site is here Stingray Digital Group Inc.
The last stock I wrote about was about was Loblaw Companies Ltd (TSX-L, OTC-LBLCF) ... learn more. The next stock I will write about will be BlackBerry Ltd (TSX-BB, NYSE-BB) ... learn more on Wednesday, August 2, 2023 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks August 2023.... learn more on Tuesday, August 1, 2023 around 5 pm.
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