I am continuing my review this stock (TSX-SPB) today as the annual report for 2009 has been issued and I follow this stock. The company changed from a Unit Trust to a corporation in 2009. What I want to look at today is the ratios that deal with stock price and look at insider information.
The good think about the Insider Buying and Insider Selling report is that there has been more insider buying than selling. There is not a lot of Insider Buying, at just less than $.4M, but it is good to see. The other thing than I like is that insider have more shares than options. The only place I can find out what the CEO and CFO Officers own is the Information Circular for the annual meetings. Here I find that the CEO owns just over 1.8M shares. The other thing I like coming from management is their promise to maintain the strict management discipline to ensure the continuation of the company’s dividend.
When I look at the P/E ratios, I find this company has a 5 year average low of 11.9 and a 5 year average high of 18.7. The current P/E I get based on earnings estimates is 13.2, a not unreasonable P/E ratio. With the Graham Price, I get a current one of $11.36. This is 15% below the current stock price of $13.16. It would seem that, the stock price, especially in recent years has gone below the Graham Price sometime during the year.
When I look at the Price/Book Value, I get a current ratio of 1.29. This is just above the 10 year average of 2.11. What would signal a good stock price is a P/B Ratio 80% below the 10 year average of 2.11. The last thing to look at is the dividend yield. The current yield is 12.3% and the 5 year average is 11.8%. This is a good yield and it is slightly above the 5 year average. This is the only stock price test that shows a reasonable current stock price.
So, what do the analysts say? When I look at analysts’ recommendations, I see an awful lot of Hold recommendations. There are a few Buy recommendations, but very few. (See my site for information on analyst ratings.) The consensus recommendations would be a Hold. I think that the major reason for the Hold is that analysts think the stock is fully, or overpriced. Those analysts with Buy recommendations mention the very good current dividend yield.
I will not be buying this stock anytime soon. I have enough stocks in the Unit Trust converting to corporation category. I will continue to follow this stock.
Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior’s Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior’s Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior’s Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior. See my spreadsheet at spb.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Thursday, May 13, 2010
Wednesday, May 12, 2010
Superior Plus Corp
I am reviewing this stock (TSX-SPB) today as the annual report for 2009 has been issued and I follow this stock. I moved in up in my review line up because I was asked to by a reader of my blog. I do not own any shares in this company. The company changed from a Unit Trust to a corporation in 2009.
The company has debt covenants that could restrict dividend payments if certain ratios are not within the requirements set forth in such debt covenants. This is normal in debt covenants. The company does not expect any future problems with dividends in regards to their debt covenants. The company says it understands the importance of dividend to their shareholders and they will continue to maintain the strict management discipline of ensuring that their short- and long-term decisions are made with the purpose of providing their shareholders with a stable long-term dividend.
The first thing I noticed when updating the spreadsheet is that 2009 was not a good year for this company as revenues, earnings and book value all declined. This puts the 5 year growth figures for these items in negative (or close to negative) growth. Even with the great dividend yield, the 5 year total return on this stock was also in negative territory.
The 10 year growth figures were much better. For example, the revenue per share grew 9.9% per year and the earnings grew 11.6% per year. Even the 10 year total return growth was quite good, coming in at 14.7% per year. I think the real problem is the volatility in cash flow. Their cash flow problems stretches back a ways, at least to 2003. The best that I can say is that, since 2008, the dividends paid has not been greater than the cash flow.
The next thing to talk about is the Liquidity Ratio and the Asset/Liability Ratio. Both these ratios are low. The current Liquidity Ratio is at 1.24 and the A/L Ratio is 1.34. These ratios are at least over 1.00; however, I would much prefer these ratios to be at least at 1.50. The point is that the company’s balance sheet is weak. I should note that I am showing the most recent ratios. Both these ratios declined from the end of 2009 when the Liquidity ratio was 1.38 and the A/L Ratio was 1.35. The 2009 ratios were not great ones, but they were at least better.
The first quarterly results of March 2010, has been in many respects quite good, with revenues, earnings and cash flow coming in better than for March 2009. The problem areas are Liquidity and A/L Ratios mentioned above and the decline in Book Value per share. The decline in Book Value per shares has more to do with the increase in shares outstanding, as Book Value increased, but not enough to cover the new outstanding shares.
Tomorrow I will talk about what the analysts say and look at spreadsheet ratios involving the stock price.
Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior’s Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior’s Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior’s Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior. See my spreadsheet at spb.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
The company has debt covenants that could restrict dividend payments if certain ratios are not within the requirements set forth in such debt covenants. This is normal in debt covenants. The company does not expect any future problems with dividends in regards to their debt covenants. The company says it understands the importance of dividend to their shareholders and they will continue to maintain the strict management discipline of ensuring that their short- and long-term decisions are made with the purpose of providing their shareholders with a stable long-term dividend.
The first thing I noticed when updating the spreadsheet is that 2009 was not a good year for this company as revenues, earnings and book value all declined. This puts the 5 year growth figures for these items in negative (or close to negative) growth. Even with the great dividend yield, the 5 year total return on this stock was also in negative territory.
The 10 year growth figures were much better. For example, the revenue per share grew 9.9% per year and the earnings grew 11.6% per year. Even the 10 year total return growth was quite good, coming in at 14.7% per year. I think the real problem is the volatility in cash flow. Their cash flow problems stretches back a ways, at least to 2003. The best that I can say is that, since 2008, the dividends paid has not been greater than the cash flow.
The next thing to talk about is the Liquidity Ratio and the Asset/Liability Ratio. Both these ratios are low. The current Liquidity Ratio is at 1.24 and the A/L Ratio is 1.34. These ratios are at least over 1.00; however, I would much prefer these ratios to be at least at 1.50. The point is that the company’s balance sheet is weak. I should note that I am showing the most recent ratios. Both these ratios declined from the end of 2009 when the Liquidity ratio was 1.38 and the A/L Ratio was 1.35. The 2009 ratios were not great ones, but they were at least better.
The first quarterly results of March 2010, has been in many respects quite good, with revenues, earnings and cash flow coming in better than for March 2009. The problem areas are Liquidity and A/L Ratios mentioned above and the decline in Book Value per share. The decline in Book Value per shares has more to do with the increase in shares outstanding, as Book Value increased, but not enough to cover the new outstanding shares.
Tomorrow I will talk about what the analysts say and look at spreadsheet ratios involving the stock price.
Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior’s Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior’s Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior’s Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior. See my spreadsheet at spb.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Tuesday, May 11, 2010
Pembina Pipelines Inc Fund 2
I would like to continue to talk about this company (TSX-PIF.UN), which I first bought in December 2001. My total return on this company is 15.9% per year. The yield on this stock, like all unit trust companies, is quite high. The current yield is 8.7%. My yield is even higher at about 15.8%. This is because I bought this stock when it was still raising its dividend. The company has said that they plan to pay the same dividend until 2013.
The first discouraging thing about this company is the amount of Insider Selling. Over the past year, there has been Insider Selling to the tune of $2.6M. There has been some Insider Buying, but only about $.5M. Of course, you never know why people are selling. A bright spot is that insiders have more stock than options. The other bright spot, of course, is the plan to retain current dividend until 2013.
Last year, because of the Dividend Reinvestment Plan (DRIP), the number of trust units outstanding increased by about 8%. The company has now suspended the DRIP plan as it says it no longer needs to sell units to fund currently planned capital expenditures and because it now has a strong balance sheet.
When I look at the P/E, the 5 year average low is 14.8 and the 5 year average high is 20. I get a current P/E of 17 on a price of $18.36. When I look at the Graham Price, I get one for 2010 of $13.27. This is some 38% below the current stock price. This is very close to the 10 year average different between the Graham Price and the Stock price. Both the above P/E and the Graham Price are based on earnings estimates for 2010.
When I look at the Price/Book Value Ratio, I find that the current P/B Ratio at 2.53 is some 25% above the 10 year average of 2.02. What you want to see is a current ratio below the 10 year average and that would point at a good current stock price. The last item to look at is the yield. The current year at 8.7% is below the 5 year average of 9.3%. What you usually want is a current yield higher than the 5 year average. However, 8.7% yield is a very good yield. I do not think that any of the above point to a current good stock price.
When I go to look at what the analysts’ recommendations are, I find that they cover all types from Strong Buy, Buy, Hold, Underperform and Sell. By far the most recommendations are in the Hold category, so the consensus recommendation would be a Hold. It would seem that the Underperform and Sell recommendations come with a stock price to be achieved within the next 12 months that is below the current price. That is, they feel the stock is overpriced.
Because I am a long term investor, I do not sell a stock just because it is overpriced. I tend to stick with good stock and not buy and sell a lot. The market has a tendency to over and under price stocks all the time. One good thing I see with analysts comments is that no one seem to feel the dividend is going to be cut. Why some analysts seem to feel this is a good buy is because of the high dividend yield. You can collect a great dividend in the meantime as you wait for this stock, and the market in general, to recover.
As I said yesterday, I feel that I have a solid investment in this stock and I will continue to hold what I have. I will not be buying more because I have enough in my portfolio. I never let any one stock get too large a proportion of portfolio.
This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is here Pembina. See my spreadsheet at pif.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
The first discouraging thing about this company is the amount of Insider Selling. Over the past year, there has been Insider Selling to the tune of $2.6M. There has been some Insider Buying, but only about $.5M. Of course, you never know why people are selling. A bright spot is that insiders have more stock than options. The other bright spot, of course, is the plan to retain current dividend until 2013.
Last year, because of the Dividend Reinvestment Plan (DRIP), the number of trust units outstanding increased by about 8%. The company has now suspended the DRIP plan as it says it no longer needs to sell units to fund currently planned capital expenditures and because it now has a strong balance sheet.
When I look at the P/E, the 5 year average low is 14.8 and the 5 year average high is 20. I get a current P/E of 17 on a price of $18.36. When I look at the Graham Price, I get one for 2010 of $13.27. This is some 38% below the current stock price. This is very close to the 10 year average different between the Graham Price and the Stock price. Both the above P/E and the Graham Price are based on earnings estimates for 2010.
When I look at the Price/Book Value Ratio, I find that the current P/B Ratio at 2.53 is some 25% above the 10 year average of 2.02. What you want to see is a current ratio below the 10 year average and that would point at a good current stock price. The last item to look at is the yield. The current year at 8.7% is below the 5 year average of 9.3%. What you usually want is a current yield higher than the 5 year average. However, 8.7% yield is a very good yield. I do not think that any of the above point to a current good stock price.
When I go to look at what the analysts’ recommendations are, I find that they cover all types from Strong Buy, Buy, Hold, Underperform and Sell. By far the most recommendations are in the Hold category, so the consensus recommendation would be a Hold. It would seem that the Underperform and Sell recommendations come with a stock price to be achieved within the next 12 months that is below the current price. That is, they feel the stock is overpriced.
Because I am a long term investor, I do not sell a stock just because it is overpriced. I tend to stick with good stock and not buy and sell a lot. The market has a tendency to over and under price stocks all the time. One good thing I see with analysts comments is that no one seem to feel the dividend is going to be cut. Why some analysts seem to feel this is a good buy is because of the high dividend yield. You can collect a great dividend in the meantime as you wait for this stock, and the market in general, to recover.
As I said yesterday, I feel that I have a solid investment in this stock and I will continue to hold what I have. I will not be buying more because I have enough in my portfolio. I never let any one stock get too large a proportion of portfolio.
This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is here Pembina. See my spreadsheet at pif.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Monday, May 10, 2010
Pembina Pipelines Inc Fund
I first bought this company (TSX-PIF.UN) in December 2001 and then a small bit more in 2009. My total return on this company is 15.9% per year. The yield on this stock, like all unit trust companies, is quite high. The current yield is 9%. My yield is even higher at about 15.8%. This is because I bought this stock when it was still raising its dividend. No one expects it to raise the dividend again, any time soon.
First, lest talk about growth figures. I have used purple on the growth in dividends, because, as I said above, they are not going to increase anytime soon. I do not find that a problem, because of the high yield on this stock. However, I think that cash Flow growth is a problem area. It is not that they have not grown the cash flow, but they are issuing a lot of shares, so the cash flow per share has been growing for the last 5 and 10 years only around only 4% per year. This is rather low. Analysts expect better growth for 2010, but I should also state that expected cash flow per share for 2009 was $1.65 and it came in at $1.42.
Also, there has not been much growth in book value. This, unfortunately, is typical of unit trust companies. The 5 and 10 year growth in book value has only been 2.3% and 1.3% per year, respectively. Other growth figures I follow are revenue and earnings and these have been growing fine for this company. There is a big difference in growth in revenue and growth in revenue per share. This is because the company has been issuing shares. Of the 17% increase in shares in 2009, a little over half was for purchasing Cutback Complex. The rest was in connection with this Distribution Reinvestment Plan.
The next thing to talk about is the Liquidity Ratio and the Asset/Liability Ratio. First, the A/L Ratio is quite high at 1.78 and this ratio has a 5 and 10 year average of 1.86 and 1.89 respectively. When you first look at the Liquidity Ratio, it looks low at only 0.55. This means the current assets cannot cover current liabilities. However, the reason it is so low is because of a portion of the long term debt coming due in 2009. This debt has been rolled over. When this long term debt due in 2009 is excluded, the ratio is better at 1.31.
I feel that I have a solid investment in this stock and I will continue to hold what I have. I will not be buying more because I have enough in my portfolio. I never let any one stock get too large a proportion of portfolio. Pembina expects to convert to a corporation in July of this year.
This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is here Pembina. See my spreadsheet at pif.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
First, lest talk about growth figures. I have used purple on the growth in dividends, because, as I said above, they are not going to increase anytime soon. I do not find that a problem, because of the high yield on this stock. However, I think that cash Flow growth is a problem area. It is not that they have not grown the cash flow, but they are issuing a lot of shares, so the cash flow per share has been growing for the last 5 and 10 years only around only 4% per year. This is rather low. Analysts expect better growth for 2010, but I should also state that expected cash flow per share for 2009 was $1.65 and it came in at $1.42.
Also, there has not been much growth in book value. This, unfortunately, is typical of unit trust companies. The 5 and 10 year growth in book value has only been 2.3% and 1.3% per year, respectively. Other growth figures I follow are revenue and earnings and these have been growing fine for this company. There is a big difference in growth in revenue and growth in revenue per share. This is because the company has been issuing shares. Of the 17% increase in shares in 2009, a little over half was for purchasing Cutback Complex. The rest was in connection with this Distribution Reinvestment Plan.
The next thing to talk about is the Liquidity Ratio and the Asset/Liability Ratio. First, the A/L Ratio is quite high at 1.78 and this ratio has a 5 and 10 year average of 1.86 and 1.89 respectively. When you first look at the Liquidity Ratio, it looks low at only 0.55. This means the current assets cannot cover current liabilities. However, the reason it is so low is because of a portion of the long term debt coming due in 2009. This debt has been rolled over. When this long term debt due in 2009 is excluded, the ratio is better at 1.31.
I feel that I have a solid investment in this stock and I will continue to hold what I have. I will not be buying more because I have enough in my portfolio. I never let any one stock get too large a proportion of portfolio. Pembina expects to convert to a corporation in July of this year.
This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is here Pembina. See my spreadsheet at pif.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Friday, May 7, 2010
Pareto Corp 2
I bought this company (TSX-PTO) in June 2009. It is a small cap dividend paying company. I do not have a lot invested in this company, as that is hard to do when the stock price is just around $1. Since I bought this stock, I have earned a Total Return of 125%. The stock has done quite well.
When I look at Insider Buying and Insider Selling, I only find some Insider Buying. This year some officers of the company have brought some $40,000 of this stock. This is not a lot, but it does show confidence in the company. Also, Insiders have been retaining their stock options. The other good thing is that the company has raised their dividends for 2010 and has also given out a special dividend. This shows that the management of this company has confidence in future earnings.
I get a P/E ratio of just 8.8 using the current stock price and estimated earnings for 2010. The 5 year average low P/E ratio is 11.7 and the 5 year average high is 20.5. For the Graham Price, I get $1.57. The stock price at $1.68 is some 7% above the Graham Price. This is not a bad stock price relative to the Graham Price. When you look at averages, the average low is 9% below the Graham Price and the average high is 68% above the Graham Price.
When I look at the dividend yield, I see that the current one of 4.8% is below the average of the last two years. However, the stock price on this company has been quite low over the last two years due to the recession. I should point out that a dividend yield of 4.8% is quite good. The last thing to look at is the Price/Book Value Ratio. The P/BV Ratio at 2.90 is about the same as the 9 year average of 2.93. So, it would seem that the current price is reasonable, but not a low as it has been over the past 2 years.
When I look for analyst recommendations, I seem to be only able to find one and that recommendation is a buy. (See my site for information on analyst ratings.) The only comments I can only find comments about this company is that the dividends are great and the fact that the company has been busy buying back shares. The shares outstanding were reduced by 25% in 2009.
I am pleased with my investment in this company. I will probably buy more in the future. However, I should point out that this is a small cap company, so these shares are not for everyone. The risk level, because it is a small cap is quite high.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at Insider Buying and Insider Selling, I only find some Insider Buying. This year some officers of the company have brought some $40,000 of this stock. This is not a lot, but it does show confidence in the company. Also, Insiders have been retaining their stock options. The other good thing is that the company has raised their dividends for 2010 and has also given out a special dividend. This shows that the management of this company has confidence in future earnings.
I get a P/E ratio of just 8.8 using the current stock price and estimated earnings for 2010. The 5 year average low P/E ratio is 11.7 and the 5 year average high is 20.5. For the Graham Price, I get $1.57. The stock price at $1.68 is some 7% above the Graham Price. This is not a bad stock price relative to the Graham Price. When you look at averages, the average low is 9% below the Graham Price and the average high is 68% above the Graham Price.
When I look at the dividend yield, I see that the current one of 4.8% is below the average of the last two years. However, the stock price on this company has been quite low over the last two years due to the recession. I should point out that a dividend yield of 4.8% is quite good. The last thing to look at is the Price/Book Value Ratio. The P/BV Ratio at 2.90 is about the same as the 9 year average of 2.93. So, it would seem that the current price is reasonable, but not a low as it has been over the past 2 years.
When I look for analyst recommendations, I seem to be only able to find one and that recommendation is a buy. (See my site for information on analyst ratings.) The only comments I can only find comments about this company is that the dividends are great and the fact that the company has been busy buying back shares. The shares outstanding were reduced by 25% in 2009.
I am pleased with my investment in this company. I will probably buy more in the future. However, I should point out that this is a small cap company, so these shares are not for everyone. The risk level, because it is a small cap is quite high.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Thursday, May 6, 2010
Pareto Corp
I bought this company (TSX-PTO) in June 2009. It is a small cap dividend paying company. I do not have a lot invested in this company, as that is hard to do when the stock price is just over $1. Since I bought this stock, I have earned a return of 125%. The stock price has risen quite well. The dividend increases have been great. Dividends were first paid in 2008. They were raised 50% in 2009, and another 33% in 2010. Also, in 2010 I received a special dividend of $.04 per share.
When looking at the growth figures, the worst is for Total Return. The 5 and 9 year growth in Total Return are 5.9% and 9% per year respectively. This company has had a number of name changes and I cannot find financial or stock prices before 2001. Also, since some of the figures in 2001 and 2002 were negative, I have only 5 year growth figures for such things as earnings and cash flow. The 5 year growth figures for earnings and cash flow are 8.7% and 14.4% respectively. Book Value growth and revenue growth are also good for the stock.
The Liquidity Ratios is a little low at 1.05 for 2009 and at 1.10 for a 5 year average. The Asset/Liability Ratio is much better at 1.61 for 2009 and 2.03 for a 5 year average. And, on to the last thing I want to talk about, which is the Return on Equity. The ROE for 2009 was 23.7%, a great figure. The 5 year running average ROE is 14.4% and a good figure also.
I am pleased with my investment in this company. I will probably buy some more of this stock as I think it has a great future. However, I should stress that this is a small cap and therefore quite risky for a dividend paying stock.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When looking at the growth figures, the worst is for Total Return. The 5 and 9 year growth in Total Return are 5.9% and 9% per year respectively. This company has had a number of name changes and I cannot find financial or stock prices before 2001. Also, since some of the figures in 2001 and 2002 were negative, I have only 5 year growth figures for such things as earnings and cash flow. The 5 year growth figures for earnings and cash flow are 8.7% and 14.4% respectively. Book Value growth and revenue growth are also good for the stock.
The Liquidity Ratios is a little low at 1.05 for 2009 and at 1.10 for a 5 year average. The Asset/Liability Ratio is much better at 1.61 for 2009 and 2.03 for a 5 year average. And, on to the last thing I want to talk about, which is the Return on Equity. The ROE for 2009 was 23.7%, a great figure. The 5 year running average ROE is 14.4% and a good figure also.
I am pleased with my investment in this company. I will probably buy some more of this stock as I think it has a great future. However, I should stress that this is a small cap and therefore quite risky for a dividend paying stock.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Wednesday, May 5, 2010
Melcor Developments Inc 2
I want to continue today to talk about this company (TSX-MRD) that I bought in 2008 and because the price really dropped, I picked up a bit more in 2009. My total return on this stock, including dividends is 12.3% per year. The reason for the great return is because of my purchase in 2009 at a stock low point.
When I look at insider buying and insider selling, I see that there is only insider buying. This amount to only .28M, but it is a good sign. The other good thing is that insiders seem to be retaining their stock options. All the stock purchases were under $12 per share, but then until very recently, this stock has been under $12 since this stock dropped in price at the end of 2008.
The current P/E ratio at 10.7 is quite low. However, the low P/E for this stock seems to have always been quite low. The 5 year average low is just 5.2. The P/E got very low over the past few years, but even looking back further, the low P/E was often 5, 6, 7 and 8. I get a P/E average high of 13.2. However, the P/E high has been the highest ever over the past few years. Over the last 10 years, the P/E high has often been around 9.
When I look at the Graham Price, I get one for 2010 of $17.27. The current price of $13.15 is some 24% below this Graham Price. Looking at the past on this stock, the stock price has often been way below the Graham Price. Over the past 10 years, the stock price has been on average 18% below the Graham Price at market highs and at 57% below the Graham Price at market lows.
When I look at the Price/Book Value Ratio, I find that the current ratio at 1.22 is almost at the 10 year average of 1.24. A good stock price is usually when the current ratio is 80% or less of the 10 year average. The last item to look at is dividend yield. The current yield is 1.9% and the 5 year average is 2.4%. Ideally, the current yield should be higher than the 5 year average. The major reason it is not on this stock is that the dividends have just been cut.
When I look for analysts’ recommendations, I seem to only find one and it is a buy. (See my site for information on analyst ratings.) This stock is not well covered. This stock was really hit hard by the recent recession for it fell from about $30 to $3, which is about a 90% drop in stock price. It has since recovered by 338%, but it is still 57% down from its peak.
It is probably at a relatively good price. Will there be a better price later. This is always hard to say. I think it is a good stock, but a rather risky one, as far as dividend paying stock goes. The dividend was decreased in 2009, so this shows that the management is a bit unsure of the future. However, there is some insider buying which shows some faith in the company by management. Also, just over 50% of the company is owned by the Melton family, which mostly owns this company through Melton Holdings Ltd.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates mostly in B.C. and Alberta.
The company also develops, owns and manages commercial income properties, as well as two golf courses. Its web site is here Melcor. See my spreadsheet at mrd.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at insider buying and insider selling, I see that there is only insider buying. This amount to only .28M, but it is a good sign. The other good thing is that insiders seem to be retaining their stock options. All the stock purchases were under $12 per share, but then until very recently, this stock has been under $12 since this stock dropped in price at the end of 2008.
The current P/E ratio at 10.7 is quite low. However, the low P/E for this stock seems to have always been quite low. The 5 year average low is just 5.2. The P/E got very low over the past few years, but even looking back further, the low P/E was often 5, 6, 7 and 8. I get a P/E average high of 13.2. However, the P/E high has been the highest ever over the past few years. Over the last 10 years, the P/E high has often been around 9.
When I look at the Graham Price, I get one for 2010 of $17.27. The current price of $13.15 is some 24% below this Graham Price. Looking at the past on this stock, the stock price has often been way below the Graham Price. Over the past 10 years, the stock price has been on average 18% below the Graham Price at market highs and at 57% below the Graham Price at market lows.
When I look at the Price/Book Value Ratio, I find that the current ratio at 1.22 is almost at the 10 year average of 1.24. A good stock price is usually when the current ratio is 80% or less of the 10 year average. The last item to look at is dividend yield. The current yield is 1.9% and the 5 year average is 2.4%. Ideally, the current yield should be higher than the 5 year average. The major reason it is not on this stock is that the dividends have just been cut.
When I look for analysts’ recommendations, I seem to only find one and it is a buy. (See my site for information on analyst ratings.) This stock is not well covered. This stock was really hit hard by the recent recession for it fell from about $30 to $3, which is about a 90% drop in stock price. It has since recovered by 338%, but it is still 57% down from its peak.
It is probably at a relatively good price. Will there be a better price later. This is always hard to say. I think it is a good stock, but a rather risky one, as far as dividend paying stock goes. The dividend was decreased in 2009, so this shows that the management is a bit unsure of the future. However, there is some insider buying which shows some faith in the company by management. Also, just over 50% of the company is owned by the Melton family, which mostly owns this company through Melton Holdings Ltd.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates mostly in B.C. and Alberta.
The company also develops, owns and manages commercial income properties, as well as two golf courses. Its web site is here Melcor. See my spreadsheet at mrd.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Tuesday, May 4, 2010
Melcor Developments Inc
I bought this company (TSX-MRD) in 2008 and because the price really dropped, I picked up a bit more in 2009. My total return on this stock, including dividends is 12.3% per year. However, I have not made any money on the stock I bought in 2008. The reason for the great return is because of my purchase in 2009 at a stock low point. This investment gave me exposure to Western Canada. This stock was on a list of stock for dividend paying growth companies I used to follow, but it is not on the other dividend lists that I follow.
When looking at my spreadsheet on this stock, I see that it has mostly done quite well over the past 5 and 10 year periods. For example, the revenue growth for the last 5 and 10 years are 9.3% and 11.6% per year, respectively. Cash flow growth has also been very good. The cash flow growth for the last 5 and 10 years are 16% and 22% per year, respectively. Good revenue growth and good cash flow growth is what will push good earnings growth in future years.
For the year ending in 2009, I had obtained earning estimate of $.40, but this company earned $.77. This caused the estimate for 2010 to be raised from $.60 to $1.23. However, earnings growth has not been as good as other growth with the 5 and 10 year growth being 4.6% and 12% per year respectively. As you can see the 10 year growth is very good, but the 5 year growth is a little low, but still acceptable.
Dividends are a bit different on this stock. The company declares dividends twice a year, so it is a bit uncertain, exactly what dividends will be received. Until 2009, they had declared progressively higher dividends. In 2009, the dividends declared dropped some 40% from 2008. The growth in dividends, even with this lower dividend for 2009, is quite good. The 5 and 10 year growth in dividends is 15.8% per year and 4.6% per year, respectively. This is good dividend growth, especially, the 5 year growth.
Moving on to the Liquidity Ratio and Asset/Liability Ratio, we find these at very good levels. The Liquidity Ratio is 1.58 and the A/L Ratio is 1.86. Any ratio at 1.50 or above is good. Last year was not a great year for a lot of companies and the Return on Equity for this stock was just 7.1%. However, the 5 year running ROE is 16.9% and this is good.
I am pleased with my investment in this stock. I do not have a lot of it and I will probably buy more in the future.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates mostly in B.C. and Alberta.
The company also develops, owns and manages commercial income properties, as well as two golf courses. Its web site is here Melcor. See my spreadsheet at mrd.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When looking at my spreadsheet on this stock, I see that it has mostly done quite well over the past 5 and 10 year periods. For example, the revenue growth for the last 5 and 10 years are 9.3% and 11.6% per year, respectively. Cash flow growth has also been very good. The cash flow growth for the last 5 and 10 years are 16% and 22% per year, respectively. Good revenue growth and good cash flow growth is what will push good earnings growth in future years.
For the year ending in 2009, I had obtained earning estimate of $.40, but this company earned $.77. This caused the estimate for 2010 to be raised from $.60 to $1.23. However, earnings growth has not been as good as other growth with the 5 and 10 year growth being 4.6% and 12% per year respectively. As you can see the 10 year growth is very good, but the 5 year growth is a little low, but still acceptable.
Dividends are a bit different on this stock. The company declares dividends twice a year, so it is a bit uncertain, exactly what dividends will be received. Until 2009, they had declared progressively higher dividends. In 2009, the dividends declared dropped some 40% from 2008. The growth in dividends, even with this lower dividend for 2009, is quite good. The 5 and 10 year growth in dividends is 15.8% per year and 4.6% per year, respectively. This is good dividend growth, especially, the 5 year growth.
Moving on to the Liquidity Ratio and Asset/Liability Ratio, we find these at very good levels. The Liquidity Ratio is 1.58 and the A/L Ratio is 1.86. Any ratio at 1.50 or above is good. Last year was not a great year for a lot of companies and the Return on Equity for this stock was just 7.1%. However, the 5 year running ROE is 16.9% and this is good.
I am pleased with my investment in this stock. I do not have a lot of it and I will probably buy more in the future.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates mostly in B.C. and Alberta.
The company also develops, owns and manages commercial income properties, as well as two golf courses. Its web site is here Melcor. See my spreadsheet at mrd.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Monday, May 3, 2010
IOU by John Lanchester
The full title of this book is IOU: Why Everyone Owes Everyone, and No One Can Pay. Do not take me the wrong way. I think that John Lanchester says some interesting things. However, let’s not mistake him for someone who knows what he is talking about when it comes to finance. The one thing I found most interesting is the change in title between UK’s market and North American’s market.
The UK’s market’s name was IOU: How Capitalism Broke Itself. I am in Canada, and they probably did not change the title for us. We do not matter that much. The change in title is for the US market and it is as I have shown, IOU: Why Everyone Owes Everyone and No One Can Pay. I personally wonder about the title, especially when talking about subprime mortgages. I thought that the whole point about subprime mortgages is that the mortgagor can not pay.
One of my biggest beef about this book is that Lanchester confuses investing and gambling, and also about taking risks and gambling. Sure, you can use the stock market to gamble. You can gamble within a lot of human activities, but investing is not gambling. Placing bets is gambling. Why do I feel this way? Because what I do is investing. I buy shares in real companies that supply goods or services that people want or need to buy. This is what I believe is investing.
However, if you buy stock of a company of which you know nothing about in the hopes that you will make capital gains, I believe that is gambling. There is also a whole lot of gray areas between what I do and those that place bets on stocks. I think that those that buy things they have no understanding of are really gambling and they are just kidding themselves if thing otherwise.
Do I take risks in buying stocks? Of course I do. But we take all sorts of risks, all the time that hardly qualifies as gambling. Crossing the street is taking a risk. Putting money in something “safe” like a bank account is also “taking a risk”. Maybe this is not as risky as investing, but still a risk. In fact, putting money under your mattress is also taking a risk.
John Lancaster talks about the recent boom and bust. However, this has been going on forever. I have been investing since the 70’s and the stock market has not been tame all along until now. Believe, as I have been invested all this time. There have been lots of booms and busts. I believe this is called the business cycle. No matter what we want, we do not seem capable of taming the business Cycle.
I think that taming the business cycle is a big socialist fantasy. Anyone who has tried to seems to just get rid of the booms. The busts always seem to come around. Economic decline seems to be to be one bust after another. I you read history as I do, booms and busts have been around a very long time. Before the industrial revolution and we were all working on the land, there were good years and bad years - booms and busts. I remember as a child reading a bible story about Egypt where someone said that they would have 7 good years followed by 7 bands years. The idea was to save in the good years to help them through the bad years.
This is no different from what we should do now. When times are good, we should save for future bad times. We do not need to go to extremes, but we do need to put something aside for the future. We should not exhaust all we get and expect good times to last forever. I think that is why the busts are so hard for some people. The have created no reserves. Both the government and people need to act more sensibly. Then, perhaps, the bad times will not be so hard.
There is a Wikipedia page about John Lanchester, see Wikipedia. If you want a regular time book review, see Globe and Mail. See John Lanchester on YouTube.
On my website is how to find this book on Amazon if you care to purchase it. See Lanchester. Also, this book review and other books I have reviewed are on my website at Book Reviews.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
The UK’s market’s name was IOU: How Capitalism Broke Itself. I am in Canada, and they probably did not change the title for us. We do not matter that much. The change in title is for the US market and it is as I have shown, IOU: Why Everyone Owes Everyone and No One Can Pay. I personally wonder about the title, especially when talking about subprime mortgages. I thought that the whole point about subprime mortgages is that the mortgagor can not pay.
One of my biggest beef about this book is that Lanchester confuses investing and gambling, and also about taking risks and gambling. Sure, you can use the stock market to gamble. You can gamble within a lot of human activities, but investing is not gambling. Placing bets is gambling. Why do I feel this way? Because what I do is investing. I buy shares in real companies that supply goods or services that people want or need to buy. This is what I believe is investing.
However, if you buy stock of a company of which you know nothing about in the hopes that you will make capital gains, I believe that is gambling. There is also a whole lot of gray areas between what I do and those that place bets on stocks. I think that those that buy things they have no understanding of are really gambling and they are just kidding themselves if thing otherwise.
Do I take risks in buying stocks? Of course I do. But we take all sorts of risks, all the time that hardly qualifies as gambling. Crossing the street is taking a risk. Putting money in something “safe” like a bank account is also “taking a risk”. Maybe this is not as risky as investing, but still a risk. In fact, putting money under your mattress is also taking a risk.
John Lancaster talks about the recent boom and bust. However, this has been going on forever. I have been investing since the 70’s and the stock market has not been tame all along until now. Believe, as I have been invested all this time. There have been lots of booms and busts. I believe this is called the business cycle. No matter what we want, we do not seem capable of taming the business Cycle.
I think that taming the business cycle is a big socialist fantasy. Anyone who has tried to seems to just get rid of the booms. The busts always seem to come around. Economic decline seems to be to be one bust after another. I you read history as I do, booms and busts have been around a very long time. Before the industrial revolution and we were all working on the land, there were good years and bad years - booms and busts. I remember as a child reading a bible story about Egypt where someone said that they would have 7 good years followed by 7 bands years. The idea was to save in the good years to help them through the bad years.
This is no different from what we should do now. When times are good, we should save for future bad times. We do not need to go to extremes, but we do need to put something aside for the future. We should not exhaust all we get and expect good times to last forever. I think that is why the busts are so hard for some people. The have created no reserves. Both the government and people need to act more sensibly. Then, perhaps, the bad times will not be so hard.
There is a Wikipedia page about John Lanchester, see Wikipedia. If you want a regular time book review, see Globe and Mail. See John Lanchester on YouTube.
On my website is how to find this book on Amazon if you care to purchase it. See Lanchester. Also, this book review and other books I have reviewed are on my website at Book Reviews.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Saturday, May 1, 2010
Manulife Financial Corp 2
Today, I would like to continue to talk about Manulife Financial Corp (TSX-MFC, NYSE-MFC). I bought this stock in 2005 and 2006, with a bit more purchased in 2009. I have made a negative return, including dividends of -6.8%.
Looking at the Insider Buying and Insider Selling reports, it would appear that everyone, but the directors, have lots more options and shares. There has been a bit of insider buying and a bit more of insider selling for this stock. None of this amounts to much, but there was $.3M net selling over the past year, all by directors.
When I look at the P/E ratio, I find the 5 year average low to be 13 and the 5 year average high to be 20.6. The current P/E ratio that I have, based on earnings estimates for 2010 is 10.4. This is lower than the 5 year average low and it is a low P/E ratio. Looking at the Graham Price, I get one of $26.44 for 2010. This Graham Price is some 26% above the current stock price of $19.60. Both this factors show a current good stock price. Commenting on the Graham Price, this stock is not often at or below the Graham Price.
Moving on to the Price/Book Value Ratio, the current ratio of 1.19 is just 57% of the 5 year average of 2.09. This also shows a good current price. The last item to look at is the yield. The current yield is 2.7% compared to a 5 year average of 2.8%. Of course, the thing to note is that the dividend payments have recently been lowered almost 50%. So, all this seems to show a good current price.
When I look at what the analysts say, I find recommendations of Strong Buy, Buy and Hold. (See my site for information on analyst ratings.) Even the analysts with Hold ratings on this stock say that it has good long term potential. They just do not think that anything will happen in the short term. Some are also worried that the first quarterly earnings reporting that is due soon will not be great. The analysts with Buy and Strong Buy recommendations feel that this company will recover very nicely and produce a good long term return.
Since I buy for the long term, I will currently be holding on to what shares I own. I probably will not buy anymore as I feel I have enough of this stock already.
This is a life insurance company in the financial services business. It offers financial protection products (e.g. Life Insurance) and wealth management services (i.e. segregated funds, mutual funds and pension products). They sell products to individuals and business. They are an international company, selling in Canada, US and Asia. This company is listed on Canadian, US, Hong Kong and Philippines Stock Exchanges. Its web site is www.manulife.com. See my spreadsheet at www.spbrunner.com/stocks/mfc.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Looking at the Insider Buying and Insider Selling reports, it would appear that everyone, but the directors, have lots more options and shares. There has been a bit of insider buying and a bit more of insider selling for this stock. None of this amounts to much, but there was $.3M net selling over the past year, all by directors.
When I look at the P/E ratio, I find the 5 year average low to be 13 and the 5 year average high to be 20.6. The current P/E ratio that I have, based on earnings estimates for 2010 is 10.4. This is lower than the 5 year average low and it is a low P/E ratio. Looking at the Graham Price, I get one of $26.44 for 2010. This Graham Price is some 26% above the current stock price of $19.60. Both this factors show a current good stock price. Commenting on the Graham Price, this stock is not often at or below the Graham Price.
Moving on to the Price/Book Value Ratio, the current ratio of 1.19 is just 57% of the 5 year average of 2.09. This also shows a good current price. The last item to look at is the yield. The current yield is 2.7% compared to a 5 year average of 2.8%. Of course, the thing to note is that the dividend payments have recently been lowered almost 50%. So, all this seems to show a good current price.
When I look at what the analysts say, I find recommendations of Strong Buy, Buy and Hold. (See my site for information on analyst ratings.) Even the analysts with Hold ratings on this stock say that it has good long term potential. They just do not think that anything will happen in the short term. Some are also worried that the first quarterly earnings reporting that is due soon will not be great. The analysts with Buy and Strong Buy recommendations feel that this company will recover very nicely and produce a good long term return.
Since I buy for the long term, I will currently be holding on to what shares I own. I probably will not buy anymore as I feel I have enough of this stock already.
This is a life insurance company in the financial services business. It offers financial protection products (e.g. Life Insurance) and wealth management services (i.e. segregated funds, mutual funds and pension products). They sell products to individuals and business. They are an international company, selling in Canada, US and Asia. This company is listed on Canadian, US, Hong Kong and Philippines Stock Exchanges. Its web site is www.manulife.com. See my spreadsheet at www.spbrunner.com/stocks/mfc.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
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