I am continuing my review of this stock (TSX-PJC.A) which I once owned. I initially bought it in March 2000 and bought some more in August 2004. I sold off my shares in 2007. Most of these shares were sold because I wanted to buy Saputo, which I liked better. The company was also in some difficulty. I made a return of 7.4% per year, including dividends.
When I look at the Insider Buying and Insider Selling I find two things. First, there has been a small bit of Insider Selling by officers of the company. This is a very small amount, so it really tells us nothing. Next, recently some of the officers have been retaining their options rather than selling them as soon as they could. This is a good sign.
When I look at the P/E Ratio 5 year average low and 5 year average high, I find them both high. The 5 year average low is 22.6 and the 5 year average high is 37.8. When the 5 year average low is over 22, it is not hard to beat. I get a current P/E ratio of 14. It is not low, but it is not a bad ratio. The reason that the P/E ratios are so high is because Jean Coutu Group is thought of as a growth company. Sites that give P/E ratios based on last 12 months earnings show no P/E ratio as the last 12 months earnings are negative.
When I look at the Price/Book Value, you do not get a good story. The Book Value has come down a lot recently, so the current P/BV ratio is some 2.6 times the long term average. Also, using the most recent quarterly statement of September 2009, I get a P/BV of 4.6. This is high. When I look at the Dividend yield, I find the current yield of 1.9% above the 5 year average of 1.1%. However, this is a good yield for this stock in any event as the Dividend Yield has often been below 1% and has hovered at .5% to .6%.
The last thing to look at is the Graham Price. This price is currently at $5.65. It has come down recently as both the earnings and book value has come down. The current stock price is more than 40% above this figure. So, it does not appear that the current price is good. The thing to mention is that mostly the stock price has been above the Graham Price. The 10 year average is for the Stock Price to be about 45% above the Graham Price.
There are a surprising number of analysts following this stock. All the recommendations are either a Buy or a Hold, plus I found one Strong Buy. The consensus recommendation is a Buy. (See my site for information on analyst ratings.) They point out that the reason for the earnings loses was because of write-offs connected with Rite Aid. The write-offs for this investment are over. It is also pointed out that the company still had good cash flows during this period, as they were making money. It is also pointed out that Jean Coutu continues to earning good money on its Canadian stores. It is felt by many that this company will make good money going forward.
At the moment, I am not investing and even if I was, I wonder if this would be a good investment. It would not have been much fun investing in this company over the last 5 years. From my perspective, the good thing is that they did raise their dividends in 2009 by 12.5% and there were a lot of companies that did not raise their dividends in 2009. The 10 year average yearly increase in Dividends of 12% is good. Since this is largely a family owned business, will they make another mistake in investments as they did in investing in Rite Aid.
The Jean Coutu Group operates a network of 343 franchised drugstores in Canada located in the provinces of Québec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Santé Beauté). The Company also holds a significant interest in Rite Aid Corporation (‘‘Rite Aid’’), one of the United States’ leading drugstore chains with approximately 5,000 drugstores in 31 states and the District of Columbia. Controlling shareholder is Jean Coutu. He has 55%, but has 92.5% voting control. Its web site is www.jeancoutu.com. See my spreadsheet at www.spbrunner.com/stocks/pjc.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Friday, January 29, 2010
Thursday, January 28, 2010
Jean Coutu Group
I once owned this stock (TSX-PJC.A). I initially bought it in March 2000 and bought some more in August 2004. I sold off my shares in 2007. Most of these shares were sold because I wanted to buy Saputo, which I liked better. The company was also in some difficulty. I made a return of 7.4% per year, including dividends.
This stock used to be well thought of. They trouble is that they purchased stores in the US and lost on this investment big time. The other item that has grown since 2007 is the dividend and this has grown over the last 5 and 10 years by 6% per year and 12% per year respectively. All other figures I follow of Revenue, Earnings, Total Return, Book Value and Cash Flow has declined quite sharply since 2007, so that all the growth figures for the last 5 and 10 years are negative, or close to negative. This is not a happy story.
For all these items, the values should be a lot better for the end of the financial year of 1 March 2010. The items have not recovered completely by any means, but they are recovering. When you look at the Liquidity Ratio and the Asset/Liability Ratio these have not suffered. The Liquidity ratio is ok at 1.31 and the Asset/Liability Ratio is very good at 1.89. The other good thing to mention is the Accrual Ratio and this is negative.
I do not know if I would again purchase this stock. The problem I see is the low dividend yield. Unlike Reitmans, which we talked about yesterday, the long term return of dividends on an original purchase, say 10 years ago is just over 1%. A lot of the problem has to do with the problems they encounter in 2007. However, the dividend yield on this stock has often been under 1% and stock with dividends yields this low tend not to give you good dividend yields on your original purchase money in the long term. Tomorrow, I will talk about what the analysts say on this stock.
The Jean Coutu Group operates a network of 343 franchised drugstores in Canada located in the provinces of Québec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Santé Beauté). The Company also holds a significant interest in Rite Aid Corporation (‘‘Rite Aid’’), one of the United States’ leading drugstore chains with approximately 5,000 drugstores in 31 states and the District of Columbia. Controlling shareholder is Jean Coutu. He has 55%, but has 92.5% voting control. Its web site is www.jeancoutu.com. See my spreadsheet at www.spbrunner.com/stocks/pjc.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
This stock used to be well thought of. They trouble is that they purchased stores in the US and lost on this investment big time. The other item that has grown since 2007 is the dividend and this has grown over the last 5 and 10 years by 6% per year and 12% per year respectively. All other figures I follow of Revenue, Earnings, Total Return, Book Value and Cash Flow has declined quite sharply since 2007, so that all the growth figures for the last 5 and 10 years are negative, or close to negative. This is not a happy story.
For all these items, the values should be a lot better for the end of the financial year of 1 March 2010. The items have not recovered completely by any means, but they are recovering. When you look at the Liquidity Ratio and the Asset/Liability Ratio these have not suffered. The Liquidity ratio is ok at 1.31 and the Asset/Liability Ratio is very good at 1.89. The other good thing to mention is the Accrual Ratio and this is negative.
I do not know if I would again purchase this stock. The problem I see is the low dividend yield. Unlike Reitmans, which we talked about yesterday, the long term return of dividends on an original purchase, say 10 years ago is just over 1%. A lot of the problem has to do with the problems they encounter in 2007. However, the dividend yield on this stock has often been under 1% and stock with dividends yields this low tend not to give you good dividend yields on your original purchase money in the long term. Tomorrow, I will talk about what the analysts say on this stock.
The Jean Coutu Group operates a network of 343 franchised drugstores in Canada located in the provinces of Québec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Santé Beauté). The Company also holds a significant interest in Rite Aid Corporation (‘‘Rite Aid’’), one of the United States’ leading drugstore chains with approximately 5,000 drugstores in 31 states and the District of Columbia. Controlling shareholder is Jean Coutu. He has 55%, but has 92.5% voting control. Its web site is www.jeancoutu.com. See my spreadsheet at www.spbrunner.com/stocks/pjc.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Wednesday, January 27, 2010
Reitmans (Canada) Ltd 2
The best thing to say about this stock is that it is a good dividend paying stock. This stock is very well though of by analysts that follow Canadian dividend paying conservative stock. Since the company has not raised their dividend as usual this past year, it will be removed from the dividend achiever type lists. However, this can happen to even the best of companies.
The first thing to mention is that there has been a bit of insider selling lately. Insider selling is always hard to read, but I doubt it means anything.
When I look at the P/E ratio on this stock, I get a ratio of 15.5. The 5 year average low is 9.4 and the 5 year average high 15.7. This P/E is close to the top end of the P/E ratio range. The sites that use the last 12 months earnings for a P/E ratio get an even higher ratio of 18. By the P/E ratio, this stock is not cheap, but a P/E of 15 is sort of a moderate ratio level. When I look at the Price/Book Value Ratio, I find that the current one of 2.22 is higher than the 10 year average by about 15%. What you like to see is the current P/BV lower than the 10 year average. However, a P/BV of 2.22 is not that high either.
When I look at the current Graham Price I find that at $13.15, it has come lower than what it was in 2008. This is mainly because the earnings are lower, but also the Book Value is expected to be lower than that of January 2009. The current stock price at $16.25 is some 24% above the Graham Price. This also points to a rather high current stock price. The final thing to look at is dividend yield and it is only here that a current low stock price is shown. The current dividend yield is 4.4% and the 5 year average is 3.1%.
There are not many analysts that follow this stock. However, what I have found are recommendations of Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)
What this stock does is reward its shareholders with good dividend income. Even now, the yield is good at 4.4%. If you had bought this stock 10 years ago, you would, on average, be earning some 30% return on your original investment. (See the section of my spreadsheet on H/L (average of high and low stock price) Yield after 5 and 10 years). The dividend return on this stock is one of the best reasons to buy this stock. As I said yesterday, I do not own this stock, but if I were looking for a retail stock, I would certainly look at this stock.
Reitmans (Canada) Limited operates a network of clothing stores specializing in women's & men's fashions and accessories. The company operates stores under the names Reitmans, Smart Set, Pennington Superstores, RW & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc 50% (Reitman family. Its web site is www.reitmans.ca. See my spreadsheet at www.spbrunner.com/stocks/ret.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The first thing to mention is that there has been a bit of insider selling lately. Insider selling is always hard to read, but I doubt it means anything.
When I look at the P/E ratio on this stock, I get a ratio of 15.5. The 5 year average low is 9.4 and the 5 year average high 15.7. This P/E is close to the top end of the P/E ratio range. The sites that use the last 12 months earnings for a P/E ratio get an even higher ratio of 18. By the P/E ratio, this stock is not cheap, but a P/E of 15 is sort of a moderate ratio level. When I look at the Price/Book Value Ratio, I find that the current one of 2.22 is higher than the 10 year average by about 15%. What you like to see is the current P/BV lower than the 10 year average. However, a P/BV of 2.22 is not that high either.
When I look at the current Graham Price I find that at $13.15, it has come lower than what it was in 2008. This is mainly because the earnings are lower, but also the Book Value is expected to be lower than that of January 2009. The current stock price at $16.25 is some 24% above the Graham Price. This also points to a rather high current stock price. The final thing to look at is dividend yield and it is only here that a current low stock price is shown. The current dividend yield is 4.4% and the 5 year average is 3.1%.
There are not many analysts that follow this stock. However, what I have found are recommendations of Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)
What this stock does is reward its shareholders with good dividend income. Even now, the yield is good at 4.4%. If you had bought this stock 10 years ago, you would, on average, be earning some 30% return on your original investment. (See the section of my spreadsheet on H/L (average of high and low stock price) Yield after 5 and 10 years). The dividend return on this stock is one of the best reasons to buy this stock. As I said yesterday, I do not own this stock, but if I were looking for a retail stock, I would certainly look at this stock.
Reitmans (Canada) Limited operates a network of clothing stores specializing in women's & men's fashions and accessories. The company operates stores under the names Reitmans, Smart Set, Pennington Superstores, RW & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc 50% (Reitman family. Its web site is www.reitmans.ca. See my spreadsheet at www.spbrunner.com/stocks/ret.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Tuesday, January 26, 2010
Reitmans (Canada) Ltd
Unlike the stock I talked about yesterday, this is a good dividend paying stock. This stock is very well though of by analysts that follow Canadian dividend paying conservative stock. This stock was on the lists Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices) until recently. I notice that it is still on the Dividend Achievers at www.indxis.com/DividendAchievers.html . Since the company has not raised their dividend as usual this past year, it is probably only a matter of time before its removal from this list also.
Not withstanding the above, this stock has a good record of dividend increases. The 5 year and 10 year growth in dividends stand at 46% per year and 27% per year. I do not think that dividend increases with continue at this pace. The payout ratio from cash flow was just below 40% in 2009 and is expected to be almost 38% this year. Note that this company’s year end is the end of January of each year.
Under this stock, the growth in earnings, dividends, total return and book value have all been great. The 5 and 10 year growth in revenue has not been as good as it was 4% per year and 8.5% per year respectively. The other less than stellar growth is in Cash Flow. Here the 10 year growth is very good, but the 5 year growth is only 3% per year. This stock has been hit by the recent recession.
This stock always seems to have a strong balance sheet. The Liquidity ratio is 4.20, where anything over 1.50 is great. The Asset/Liability Ratio is also high at 5.23. Here again, anything over 1.50 is great. When you look at the Return on Equity, this company has also done well. The 5 year average ROE for the year ending January 31, 2009 was 20%. Last year the ROE was 16% and this year, so far, it is almost 14%. This is not bad considering this is retail and we are coming out of a recession. The Accrual Ratio was high at just over 4% at the end of January 2009, but the current one is negative, so this is a good change.
I do not own this stock, but if I was looking for a retail stock, this is certainly one I would consider.
Reitmans (Canada) Limited operates a network of clothing stores specializing in women's & men's fashions and accessories. The company operates stores under the names Reitmans, Smart Set, Pennington Superstores, RW & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc 50% (Reitman family. Its web site is www.reitmans.ca. See my spreadsheet at www.spbrunner.com/stocks/ret.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Not withstanding the above, this stock has a good record of dividend increases. The 5 year and 10 year growth in dividends stand at 46% per year and 27% per year. I do not think that dividend increases with continue at this pace. The payout ratio from cash flow was just below 40% in 2009 and is expected to be almost 38% this year. Note that this company’s year end is the end of January of each year.
Under this stock, the growth in earnings, dividends, total return and book value have all been great. The 5 and 10 year growth in revenue has not been as good as it was 4% per year and 8.5% per year respectively. The other less than stellar growth is in Cash Flow. Here the 10 year growth is very good, but the 5 year growth is only 3% per year. This stock has been hit by the recent recession.
This stock always seems to have a strong balance sheet. The Liquidity ratio is 4.20, where anything over 1.50 is great. The Asset/Liability Ratio is also high at 5.23. Here again, anything over 1.50 is great. When you look at the Return on Equity, this company has also done well. The 5 year average ROE for the year ending January 31, 2009 was 20%. Last year the ROE was 16% and this year, so far, it is almost 14%. This is not bad considering this is retail and we are coming out of a recession. The Accrual Ratio was high at just over 4% at the end of January 2009, but the current one is negative, so this is a good change.
I do not own this stock, but if I was looking for a retail stock, this is certainly one I would consider.
Reitmans (Canada) Limited operates a network of clothing stores specializing in women's & men's fashions and accessories. The company operates stores under the names Reitmans, Smart Set, Pennington Superstores, RW & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc 50% (Reitman family. Its web site is www.reitmans.ca. See my spreadsheet at www.spbrunner.com/stocks/ret.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Monday, January 25, 2010
ONEX Corp
I follow this stock because I once owned it. I bought it at the end of 2001 and sold in April of 2008. I made some 5.9% return including dividends. I mistook this stock for a Dividend Paying stock. Sometimes it is a good idea to review the sort of stock that we should not buy.
Why I say I mistook it for a dividend paying stock is because they pay a dividend. However, if you look at the spreadsheet, you will see that there has been no growth in dividends over the last 10 years. In fact, the dividend paid has not changed since 1995. They are currently paying out some 1% of its cash flow in dividends. The current yield at .43% is way below 1%. I seriously do not know why they even bother to pay a dividend.
The only really good growth I can find is for Revenues and these have grown at 9.5% per year and 11% per year for the last 5 and 10 years. The growth in total returns for the last 5 and 10 years is 5% per year and 6% per year. Their web site says you should invest because the company has returned 14% per year to the shareholders over the last 20 years. It would seem that all this return is way past for this stock.
When you look at the Insider Buying and Insider Selling, you find that there has been some $8.2M of selling and some $2m of buying. Most of the selling is by the CEO, who is Gerald Schwartz, a major owner of this company’s stock. For the current year P/E, I get is 42. The sites that show the P/E based on last 12 months of earnings show no P/E, as there were negative earnings.
When I look at the Graham Price, I get one of $12.93. This is some 97% below the current stock price. Although, I must admit this Graham Price fluctuates a lot because earnings fluctuates a lot. When you look at the Price/Book Value Ratio, the current one is only some 55% of the 10 year average. And, the P/BV ratio at 2.06 is not high. However, the Book Value also fluctuates and growth shown for Book Value is probably not representative of what really is happening.
When I look at the analysts recommendations, I find these recommendations to vary from Strong Buy to Hold. The Buy recommendation is the consensus. Analysts seem to feel that this stock will increase their earnings over the next couple of years. (See my site for information on analyst ratings.)
I tried to cover this stock as quickly as possible. As I said above, I once mistook this stock for a dividend paying one, but no longer. I currently have no interest in buying it. I do not see how I could make a decent return if I did buy it.
Since 1984, Onex has acquired and built great businesses as a private equity investor. More recently, we have leveraged our investing expertise to build an asset management business. Onex currently manages over US$7 billion of third-party capital through its Onex Partners and ONCAP fund families. Its current focus is on growing its real estate and credit securities platforms. They have offices in Toronto and New York. Its web site is www.onex.com. See my spreadsheet at www.spbrunner.com/stocks/ocx.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Why I say I mistook it for a dividend paying stock is because they pay a dividend. However, if you look at the spreadsheet, you will see that there has been no growth in dividends over the last 10 years. In fact, the dividend paid has not changed since 1995. They are currently paying out some 1% of its cash flow in dividends. The current yield at .43% is way below 1%. I seriously do not know why they even bother to pay a dividend.
The only really good growth I can find is for Revenues and these have grown at 9.5% per year and 11% per year for the last 5 and 10 years. The growth in total returns for the last 5 and 10 years is 5% per year and 6% per year. Their web site says you should invest because the company has returned 14% per year to the shareholders over the last 20 years. It would seem that all this return is way past for this stock.
When you look at the Insider Buying and Insider Selling, you find that there has been some $8.2M of selling and some $2m of buying. Most of the selling is by the CEO, who is Gerald Schwartz, a major owner of this company’s stock. For the current year P/E, I get is 42. The sites that show the P/E based on last 12 months of earnings show no P/E, as there were negative earnings.
When I look at the Graham Price, I get one of $12.93. This is some 97% below the current stock price. Although, I must admit this Graham Price fluctuates a lot because earnings fluctuates a lot. When you look at the Price/Book Value Ratio, the current one is only some 55% of the 10 year average. And, the P/BV ratio at 2.06 is not high. However, the Book Value also fluctuates and growth shown for Book Value is probably not representative of what really is happening.
When I look at the analysts recommendations, I find these recommendations to vary from Strong Buy to Hold. The Buy recommendation is the consensus. Analysts seem to feel that this stock will increase their earnings over the next couple of years. (See my site for information on analyst ratings.)
I tried to cover this stock as quickly as possible. As I said above, I once mistook this stock for a dividend paying one, but no longer. I currently have no interest in buying it. I do not see how I could make a decent return if I did buy it.
Since 1984, Onex has acquired and built great businesses as a private equity investor. More recently, we have leveraged our investing expertise to build an asset management business. Onex currently manages over US$7 billion of third-party capital through its Onex Partners and ONCAP fund families. Its current focus is on growing its real estate and credit securities platforms. They have offices in Toronto and New York. Its web site is www.onex.com. See my spreadsheet at www.spbrunner.com/stocks/ocx.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Friday, January 22, 2010
TMX Group 2
I am continuing my review of TMS Group (TSX-X) today. I do not personally own this stock, but I do follow it. One of my main complains about this stock has changed, and that is the lack of growth in Book Value. After this stock because public, the book value dropped significantly. It is now recovering very nicely.
When I look at insider buying and insider selling, I find that over the past year there has been some $8.2M of insider selling and very little insider buying. Most of the selling appears to be by one director, who still has a substantial investment in this company. The other thing is that most insiders seem to have more options than stock. Selling by a limited number of people in a recession does not mean much as this is a time that people need money. The problem with looking at insider selling is that people sell for all sorts of reasons unconnected with a stock future prospects. It is only strong insider buying that really tells you something.
The first thing to look when considering a stock purchase is the P/E ratio. The 5 year average low is 18 and the 5 year average high is 26.5. The P/E low is not particularly low. A low P/E would be closer to 10. However, the current P/E, based on expected earnings for 2009 is 13.5. This is not bad. I get a forward P/E of 12 and this is even better. For sites that use the last 12 months earnings, they also get a P/E around 13.
Now, I shall go on to talk about the Price/Book Value Ratio. I touched on the Book Value in my open remarks. The current ratio of 2.87 is less than 30% of the Price/Book Ratio of the last 8 years. Usually, you look for one that is 80% or less of the long term Price/Book Value ratio. However, the Book Value has grown rapidly over the last few years after it dropped initially after this stock went public. The P/BV rating is ok at 2.87, but it is not that low.
The next thing to talk about is the Graham Price. This Graham Price at $25.35 is some 24% below the current stock price of $31.90. The only good thing to say is that, on average the Graham Price has been at 50% less than the stock price. The only time I can see that the stock price came near to the Graham Price was in later part of 2008.
The last thing I want to look at is the dividend yield. The current dividend yield at 4.8% is higher than the 5 year average of 3%. This is pointing at the relatively good currently stock price. The other things that I looked at, only point to a current reasonable price.
When I look at analysts recommendations, I find they range from Buy to Underperform. The consensus rating would be Hold. (See my site for information on analyst ratings.) The volume of trading on the TSX is down due to the recession. The other thing is that there are other trading platforms and this could very well affect the long term earnings for this stock.
I can see why the consensus recommendation is a Hold. For me to consider this stock, it would have to start raising their dividends again, and I do not see this happening soon. The other thing is it is hard to know how stock trading will change in the future. We do not know what will happen because of other stock trading platforms besides those owned my TMX group.
TMX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TMX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in Canada. TMX Group has its headquarters in Toronto and maintains offices in Montreal, Calgary and Vancouver. Its web site is www.tsx.com. See my spreadsheet at www.spbrunner.com/stocks/x.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
When I look at insider buying and insider selling, I find that over the past year there has been some $8.2M of insider selling and very little insider buying. Most of the selling appears to be by one director, who still has a substantial investment in this company. The other thing is that most insiders seem to have more options than stock. Selling by a limited number of people in a recession does not mean much as this is a time that people need money. The problem with looking at insider selling is that people sell for all sorts of reasons unconnected with a stock future prospects. It is only strong insider buying that really tells you something.
The first thing to look when considering a stock purchase is the P/E ratio. The 5 year average low is 18 and the 5 year average high is 26.5. The P/E low is not particularly low. A low P/E would be closer to 10. However, the current P/E, based on expected earnings for 2009 is 13.5. This is not bad. I get a forward P/E of 12 and this is even better. For sites that use the last 12 months earnings, they also get a P/E around 13.
Now, I shall go on to talk about the Price/Book Value Ratio. I touched on the Book Value in my open remarks. The current ratio of 2.87 is less than 30% of the Price/Book Ratio of the last 8 years. Usually, you look for one that is 80% or less of the long term Price/Book Value ratio. However, the Book Value has grown rapidly over the last few years after it dropped initially after this stock went public. The P/BV rating is ok at 2.87, but it is not that low.
The next thing to talk about is the Graham Price. This Graham Price at $25.35 is some 24% below the current stock price of $31.90. The only good thing to say is that, on average the Graham Price has been at 50% less than the stock price. The only time I can see that the stock price came near to the Graham Price was in later part of 2008.
The last thing I want to look at is the dividend yield. The current dividend yield at 4.8% is higher than the 5 year average of 3%. This is pointing at the relatively good currently stock price. The other things that I looked at, only point to a current reasonable price.
When I look at analysts recommendations, I find they range from Buy to Underperform. The consensus rating would be Hold. (See my site for information on analyst ratings.) The volume of trading on the TSX is down due to the recession. The other thing is that there are other trading platforms and this could very well affect the long term earnings for this stock.
I can see why the consensus recommendation is a Hold. For me to consider this stock, it would have to start raising their dividends again, and I do not see this happening soon. The other thing is it is hard to know how stock trading will change in the future. We do not know what will happen because of other stock trading platforms besides those owned my TMX group.
TMX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TMX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in Canada. TMX Group has its headquarters in Toronto and maintains offices in Montreal, Calgary and Vancouver. Its web site is www.tsx.com. See my spreadsheet at www.spbrunner.com/stocks/x.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Thursday, January 21, 2010
TMX Group
I have not reviewed this stock (TSX-X) since June of 2008, so I thought it was time for an updated. This is the company that runs the Toronto Stock Exchange and I want to talk about how successful it is as a stock. I do not own this stock and at the present time, I have no current intentions of buying it. The TSX was a non-profit organization before becoming a stock corporation.
The information on the stock company only goes back 5 years. I have some figures for when this was a non-profit organization. This stock is not on the dividend achievers lists that I follow, probably because it has not had enough years as a dividend paying stock. The thing I see about the dividends is that lately, they have not grown much. I do not see them growing much in the next few years as I think that the dividend payouts are too high a percentage of the cash flow.
All the growth figures that I follow are good on this company. What is especially good is the growth in revenue and cash flow as these are important indicators of possible future progress. The stock has been hit by the recent recession as all stocks have. The lowest growth rate is that of total investor’s earnings. This was just over 8% for the year ending 2008 and I see about the same for the year ending in 2009. This is not a bad return. The real negative I see here is the lack of potential dividend increases.
When looking at the Liquidity Ratio and the Asset/Liability Ratio, I see rather low ratios with these ratios being 1.09 and 1.32 respectively at the present time. This means that the current assets can cover the current liabilities. It also means the assets can cover the liabilities. However, it is preferred that both these ratios be at 1.50 or better. The 5 and 10 year averages for these ratios are much better. This is because these ratios have been coming down over the last 5 and 10 years. The best I can say is that these ratios seem to be stabilizing at the present time.
When you look at the Return on Equity for this stock, the numbers are absolutely great. The 5 year average is 50%. This is because of the high ROE between 2004 and 2007. The ROE for 2008 was 23% and the ROE for 2009 so far is at 21%. These latter figures are good ROE figures. The Accrual Ratio is low, so there is nothing much further to say on it. The Accrual Ratio has to be very high or very low to make any difference in stock analysis.
As I said before, I do not intend to buy this stock at the present time, but I do follow it. Tomorrow I will talk about this stock’s price and also talk about what the analysts are saying.
TMX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TMX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in Canada. TMX Group has its headquarters in Toronto and maintains offices in Montreal, Calgary and Vancouver. Its web site is www.tsx.com. See my spreadsheet at www.spbrunner.com/stocks/x.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The information on the stock company only goes back 5 years. I have some figures for when this was a non-profit organization. This stock is not on the dividend achievers lists that I follow, probably because it has not had enough years as a dividend paying stock. The thing I see about the dividends is that lately, they have not grown much. I do not see them growing much in the next few years as I think that the dividend payouts are too high a percentage of the cash flow.
All the growth figures that I follow are good on this company. What is especially good is the growth in revenue and cash flow as these are important indicators of possible future progress. The stock has been hit by the recent recession as all stocks have. The lowest growth rate is that of total investor’s earnings. This was just over 8% for the year ending 2008 and I see about the same for the year ending in 2009. This is not a bad return. The real negative I see here is the lack of potential dividend increases.
When looking at the Liquidity Ratio and the Asset/Liability Ratio, I see rather low ratios with these ratios being 1.09 and 1.32 respectively at the present time. This means that the current assets can cover the current liabilities. It also means the assets can cover the liabilities. However, it is preferred that both these ratios be at 1.50 or better. The 5 and 10 year averages for these ratios are much better. This is because these ratios have been coming down over the last 5 and 10 years. The best I can say is that these ratios seem to be stabilizing at the present time.
When you look at the Return on Equity for this stock, the numbers are absolutely great. The 5 year average is 50%. This is because of the high ROE between 2004 and 2007. The ROE for 2008 was 23% and the ROE for 2009 so far is at 21%. These latter figures are good ROE figures. The Accrual Ratio is low, so there is nothing much further to say on it. The Accrual Ratio has to be very high or very low to make any difference in stock analysis.
As I said before, I do not intend to buy this stock at the present time, but I do follow it. Tomorrow I will talk about this stock’s price and also talk about what the analysts are saying.
TMX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TMX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in Canada. TMX Group has its headquarters in Toronto and maintains offices in Montreal, Calgary and Vancouver. Its web site is www.tsx.com. See my spreadsheet at www.spbrunner.com/stocks/x.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Wednesday, January 20, 2010
State Of Dividends 4th Quarter 2009
Today, I am updating my spreadsheet on dividends. I am showing not only my stocks, but also all the ones I follow and have blogged about. For all these stock, I have shown in the “09” column if the company actually increased their dividend yet for the current year of 2009. I have also started columns for 2010 dividends. Next, I will talk about the dividends for specific companies.
In this last quarter, I have had only three stocks increase their dividends. They are BCE Inc (TSX-BCE), Canadian Real Estate Investment Trust (TSX-REF.UN) and Emera Inc (TSX- EMA). I have certainly not done as well this year in dividend increases as I did last year. This is to be expected as we are coming out of, maybe, a recession. The one good thing is that no company I held decreased their dividends in the last quarter of 2009.
With BCE Inc (TSX-BCE), after no dividend increases in 2008, they raised dividends twice this year. They increased the dividends in April 2009 and then in October 2009. This gives me some 5.5% more dividends for 2009 and also, my total dividends in 2010 over 2009 will be 5% higher because of these two dividend increases. When dividend increases come after the first dividend is paid, it will increase the dividends paid in the following year also.
For BCE, I got 4 dividends of $.365 in 2008 for a total dividend of $1.46 per share. In 2009, I got one dividend of $.365, two dividends of $.385 and one dividend of $.405 for total dividends of $1.54. If in 2010, I get 4 dividends of $.405, I will get total dividends of $1.62. The other good thing about BCE Inc is that the dividend yield is currently at 5.5%. The last thing to mention is that the dividend increases for this stock have been at 4% per year for the last 5 years. Since inflation is quite low, this is good. You want dividend increases above inflation, or your income will just keep falling behind.
With Emera Inc (TSX-EMA), the recent dividend increases have not been great as this stock has a 5 year growth in dividends of just 2.3% per year. Currently this also is above inflation. The dividend increases this year is a healthy 6.7%. For this stock, as the dividend change is late in the year, I will earn some 5.8% move in dividends in 2010 if the rate remains the same. The current yield for this stock is 4%.
The last stock to talk about is Canadian Real Estate Income Trust (TSX-REF.UN). Unit trust companies are not known for big dividend increases, but for good yields. This is a trade off when you live off of dividend income. Having some unit trust companies will raise your income per year, but the dividend income will not rise much. Mostly, you can expect distribution rises to keep pace with inflation. Since this is a REIT (Real Estate Income Trust), it is not affected by the new tax laws coming into effect in 2011.
The dividend increase for Cdn Real Estate Trust for this year is just 1% and this is low. Because the increase is late in the year, my dividends will also be higher in 2010 by 1.4%. This is not much again. This income trust has raised its dividend by just under 2% per year over the last 5 years. This is probably barely keeping in line with inflation. We are lucky that inflation has been low recently. The yield on this stock at 4.8% is not a bad yield. Although this dividend yield is not particularly high given that BCE’s dividend yield is currently 5.5%.
If you are looking for stocks to buy this winter, you might want to first look at the ones with dividend increases.
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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
In this last quarter, I have had only three stocks increase their dividends. They are BCE Inc (TSX-BCE), Canadian Real Estate Investment Trust (TSX-REF.UN) and Emera Inc (TSX- EMA). I have certainly not done as well this year in dividend increases as I did last year. This is to be expected as we are coming out of, maybe, a recession. The one good thing is that no company I held decreased their dividends in the last quarter of 2009.
With BCE Inc (TSX-BCE), after no dividend increases in 2008, they raised dividends twice this year. They increased the dividends in April 2009 and then in October 2009. This gives me some 5.5% more dividends for 2009 and also, my total dividends in 2010 over 2009 will be 5% higher because of these two dividend increases. When dividend increases come after the first dividend is paid, it will increase the dividends paid in the following year also.
For BCE, I got 4 dividends of $.365 in 2008 for a total dividend of $1.46 per share. In 2009, I got one dividend of $.365, two dividends of $.385 and one dividend of $.405 for total dividends of $1.54. If in 2010, I get 4 dividends of $.405, I will get total dividends of $1.62. The other good thing about BCE Inc is that the dividend yield is currently at 5.5%. The last thing to mention is that the dividend increases for this stock have been at 4% per year for the last 5 years. Since inflation is quite low, this is good. You want dividend increases above inflation, or your income will just keep falling behind.
With Emera Inc (TSX-EMA), the recent dividend increases have not been great as this stock has a 5 year growth in dividends of just 2.3% per year. Currently this also is above inflation. The dividend increases this year is a healthy 6.7%. For this stock, as the dividend change is late in the year, I will earn some 5.8% move in dividends in 2010 if the rate remains the same. The current yield for this stock is 4%.
The last stock to talk about is Canadian Real Estate Income Trust (TSX-REF.UN). Unit trust companies are not known for big dividend increases, but for good yields. This is a trade off when you live off of dividend income. Having some unit trust companies will raise your income per year, but the dividend income will not rise much. Mostly, you can expect distribution rises to keep pace with inflation. Since this is a REIT (Real Estate Income Trust), it is not affected by the new tax laws coming into effect in 2011.
The dividend increase for Cdn Real Estate Trust for this year is just 1% and this is low. Because the increase is late in the year, my dividends will also be higher in 2010 by 1.4%. This is not much again. This income trust has raised its dividend by just under 2% per year over the last 5 years. This is probably barely keeping in line with inflation. We are lucky that inflation has been low recently. The yield on this stock at 4.8% is not a bad yield. Although this dividend yield is not particularly high given that BCE’s dividend yield is currently 5.5%.
If you are looking for stocks to buy this winter, you might want to first look at the ones with dividend increases.
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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Tuesday, January 19, 2010
Innergex Power Income Fund 2
I want to continue my review today of Innergex Power Income Fund (TSX-IEF.UN). This is a stock I held for a short period of time from 2006 to 2008. I bought this stock in 2006 as it was highly rated and it was in the alternative energy field. I sold in 2008, as dividend increase was very low.
When I look at the Insider Buying and Insider Selling on this stock, I find one lone buy costing some $18,000 for the CFO of the company in March of 2009. A company called Innergex Renewable Energy Inc. operates this company and owes almost 5% of the shares.
There is only 5 years of data on this company, so this is not much. The 5 year average P/E low is 25 and the 5 year average high is 30. The average low is a high P/E. The current P/E I calculate to be 14 and this is probably not a bad one, but a little high. For sites using the last 12 months of earnings, they get a P/E of close to 60 and this is, of course, very high, but earnings have been low lately. When I look at the Price/Book Value ratio, the current ratio is above the 5 year average. This is not surprising as the Book Value is decreasing.
Looking at the dividend yield, the current yield is 9.5%, this is above the 5 year average of 7.9%, and so this says the stock price is relatively good. The other thing is the Graham Price. This price is $10.30 compared to a stock price of $10.46. This says the stock price is also relatively good.
When I look at what the analysts recommend, what I find is Buy and Hold recommendations. The consensus is probably a Hold. (See my site for information on analyst ratings.) Those with a Buy recommendation feel that this is a conservative investment and an investor can gain with the distributions with little downward pressure on the stock price.
I am going to continue to track this stock for awhile, but I think the negatives for it is the declining Book Value and the fact that management has not be very explicit on what they are going to do in 2011. This is when most trusts will convert to corporations, as they will be tax as corporations. The only thing I see is that the management has said they the tax changes will adversely affect the distributions. They give no idea of how adverse the affect will be. So, I find it hard to judge if this is a good investment or not.
Innergex Power Income Fund acquires and operates a portfolio of hydroelectric facilities and wind farms in North America that produce electricity exclusively from renewable energy sources. Its web site is www.innergex.com. See my spreadsheet at www.spbrunner.com/stocks/ief.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
When I look at the Insider Buying and Insider Selling on this stock, I find one lone buy costing some $18,000 for the CFO of the company in March of 2009. A company called Innergex Renewable Energy Inc. operates this company and owes almost 5% of the shares.
There is only 5 years of data on this company, so this is not much. The 5 year average P/E low is 25 and the 5 year average high is 30. The average low is a high P/E. The current P/E I calculate to be 14 and this is probably not a bad one, but a little high. For sites using the last 12 months of earnings, they get a P/E of close to 60 and this is, of course, very high, but earnings have been low lately. When I look at the Price/Book Value ratio, the current ratio is above the 5 year average. This is not surprising as the Book Value is decreasing.
Looking at the dividend yield, the current yield is 9.5%, this is above the 5 year average of 7.9%, and so this says the stock price is relatively good. The other thing is the Graham Price. This price is $10.30 compared to a stock price of $10.46. This says the stock price is also relatively good.
When I look at what the analysts recommend, what I find is Buy and Hold recommendations. The consensus is probably a Hold. (See my site for information on analyst ratings.) Those with a Buy recommendation feel that this is a conservative investment and an investor can gain with the distributions with little downward pressure on the stock price.
I am going to continue to track this stock for awhile, but I think the negatives for it is the declining Book Value and the fact that management has not be very explicit on what they are going to do in 2011. This is when most trusts will convert to corporations, as they will be tax as corporations. The only thing I see is that the management has said they the tax changes will adversely affect the distributions. They give no idea of how adverse the affect will be. So, I find it hard to judge if this is a good investment or not.
Innergex Power Income Fund acquires and operates a portfolio of hydroelectric facilities and wind farms in North America that produce electricity exclusively from renewable energy sources. Its web site is www.innergex.com. See my spreadsheet at www.spbrunner.com/stocks/ief.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Monday, January 18, 2010
Innergex Power Income Fund
What I want to review today is a stock (TSX-IEF.UN) I held for a short period of time from 2006 to 2008 and talk about how it is doing. I bought this stock in 2006 as it was highly rated and it was in the alternative energy field. I sold in 2008, as dividend increase was very low. I also notice that although it is still followed by some analysts, it is not as well followed, as it was when I bought this stock.
Since this stock was just started in 2003, we only have 5 years of data on it. The good things about this stock are that revenue and cash flow has been growing, at the rate of 11% and 15.5% per year, respectively. For good things to happen to a stock, you need good revenue and cash flow increases. For other growth figures, I follow; this stock has not gone anywhere. The Book Value has been eroded by about 6% per year, and both the stock price and the dividends have not changed much.
When I look at the Liquidity Ratio, I find that it is low and although the 5 year average is not too bad at 1.23, the current one at 0.99 and the one for the end of 2008 at 1.00 are low. This means that the current assets can barely cover the liabilities. The Asset/Liability Ratio at 1.59 is much better. This Ratio has a 5 year average of 1.96, which is even better.
The Return on Equity has always been very low on this stock, but the one for the 9 months ending in September is quite good at 13.5%. The accrual ratio is not bad being negative, although when you consider the Financial Cash Flow, this ratio is quite high at 4%.
Tomorrow I will talk about what the analysts say about this stock. One thing that does concern me is that they have not really said what they will do about becoming a corporation in 2011. The only thing I can find is that they mention that the tax changes will adversely affect the distributions.
Innergex Power Income Fund acquires and operates a portfolio of hydroelectric facilities and wind farms in North America that produce electricity exclusively from renewable energy sources. Its web site is www.innergex.com. See my spreadsheet at www.spbrunner.com/stocks/ief.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Since this stock was just started in 2003, we only have 5 years of data on it. The good things about this stock are that revenue and cash flow has been growing, at the rate of 11% and 15.5% per year, respectively. For good things to happen to a stock, you need good revenue and cash flow increases. For other growth figures, I follow; this stock has not gone anywhere. The Book Value has been eroded by about 6% per year, and both the stock price and the dividends have not changed much.
When I look at the Liquidity Ratio, I find that it is low and although the 5 year average is not too bad at 1.23, the current one at 0.99 and the one for the end of 2008 at 1.00 are low. This means that the current assets can barely cover the liabilities. The Asset/Liability Ratio at 1.59 is much better. This Ratio has a 5 year average of 1.96, which is even better.
The Return on Equity has always been very low on this stock, but the one for the 9 months ending in September is quite good at 13.5%. The accrual ratio is not bad being negative, although when you consider the Financial Cash Flow, this ratio is quite high at 4%.
Tomorrow I will talk about what the analysts say about this stock. One thing that does concern me is that they have not really said what they will do about becoming a corporation in 2011. The only thing I can find is that they mention that the tax changes will adversely affect the distributions.
Innergex Power Income Fund acquires and operates a portfolio of hydroelectric facilities and wind farms in North America that produce electricity exclusively from renewable energy sources. Its web site is www.innergex.com. See my spreadsheet at www.spbrunner.com/stocks/ief.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 at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
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