I do not own this stock (TSX- HPS.A, OTC-HMDPF). Here is the hype that I read about this stock in the Buy-Sell Adviser published by MPL Communications. This stock was recommended by Ryan Irvine of Keystone Financial.
When I look at the insider trading report, I find a small amount of insider buying and a small amount of insider selling, with a net of insider buying. This tells us nothing. There are outstanding options, but not much. There is insider ownership. For example, the CEO has $8.4M in shares (Class A) and $1M in options. The CEO also owns all the Class B shares worth about $22.7M. The CFO has $1.7M in shares and $1M in options.
There are 4 institutions that hold some 40% of the outstanding shares. They have not bought or sold any within the last 3 months. For a small company, large insider ownership is a positive.
The 5 year low, median and high median Price/Earnings Ratios are 8.36, 9.82 and 11.29. The current P/E based on a stock price of $8.39 and 2013 earnings of $1.14 is 7.36. This low P/E ratio suggests that the stock price is good. If we use the 2012 earnings estimate of $.98, we get a P/E of 8.56. This P/E ratio also suggests a low stock price.
I get a 2013 Graham Price of $14.58. The 10 year low, median and high median Price/Graham Price Ratios are 0.36, 0.68 and 0.92. The current P/GP Ratio is 0.58. This low ratio suggests that the stock price is good. Also, a ratio below 1.00 says the stock price is a good one.
I get a 10 year median Price/Book Value per Share Ratio of 1.20 and a current P/B Ratios of 1.01. The current ratio is 84% of the 10 year median. This ratio suggests the stock price is good. (For this ratio to show a cheap stock price, the current P/B ratios would have to be 80% or less than the 10 year median.)
The 3 year median dividend yield is just 1.31% and the current dividend yield at 2.15% is some 63% higher. Normally this would suggest that the stock price is cheap. However, dividends started quite low on this company and have increased rapidly. So this is not much of a definitive test.
When I look for analysts' recommendations, I can only find one and that recommendation is a buy. The 12 months stock price given is $12.00. This implies a total return of 45.17%, with 2.15% from dividends and 43.03% from capital gain. (This sounds good, but who knows what the stock market has in store for us.)
Hammond Power Solutions Inc. (HPS) has won the U.S. and Canadian Electrical Supplier of the Year for Leadership award in October 2012. There is a discussion about this stock on Stockhouse.
I think that the current stock price is good. Purchasing this company might also be considered to be a play on the alternative energy industry. This company would be considered to be a risky investment because they will probably be hit hard in any recession and there are always recessions. This is why I like their debt ratios.
Hammond Power Solutions Inc. is the largest manufacturer of dry-type transformers in North America. They engineer and manufacture a wide range of custom transformers that are exported globally in electrical equipment and systems. They support solid industries such as oil and gas, mining, steel, waste and water treatment, and wind power-generation. Its web site is here Hammond Power Solutions. See my spreadsheet at hps.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 or StockTwits.
Friday, January 4, 2013
Thursday, January 3, 2013
Hammond Power Solutions Inc
I do not own this stock (TSX- HPS.A, OTC- HMDPF). Here is the hype that I read about this stock in the Buy-Sell Adviser published by MPL Communications.
This stock was recommended by Ryan Irvine of Keystone Financial. He said to expect volatility, but that the stock will be a good long-term buy over the next one to three years. He expects the company will change from a semi-annual dividend to a quarterly one in 2013. I have reviewing it as Ryan Irvine has suggested some very good stocks in the past.
First I will answer the question of whether or not it has made money for its shareholders. Well, the last 5 years have not been great. Total return is just 3.9% per year. It hit a high in 2007 and was hard hit by the recent recession. Since this an industrial company, this is not surprising. However, if you look at the return over the past 10 years, it is at 25.8% per year.
Since dividends only started in 2009, not much of the above total returns are from dividends. Over the past 10 years, it is just 0.72% and over the past 5 years, it is at 1%. Although current dividend yield is 2.2%, over the past 3 years, the median is just 1.27%. The other side of the coin is that dividends have risen by 22.5% per year over the past 2 years since they have been started. For 2012, the dividends have increased by 20%.
If these increases continue, then the potential future in dividends looks good. Using the current dividend yield of 2.2% and increase of 20% a year, you could be earning almost a 14% yield on stock purchases today in 10 years. In 15 years, you could have a yield 34% on a stock purchased today.
The next question has to do with Dividend Payout Ratios, or can the company afford the dividends? This is a definite yes. The DPRs for earnings over the past 3 years is 15.7%. The DPRs for Cash Flow is 10%. (See my site for information on Dividend Payout Ratios).
The next question is about the strength of the balance sheet (or if you prefer the debt ratios). The current Liquidity Ratios are great. The 5 year median Liquidity Ratio is 2.18. The current one is a bit lower at 1.75. However, they are above the 1.50 I like. The Debt Ratio is also good. The current one is 2.84 and the 5 year median is 2.98.
The current Leverage and Debt/Equity Ratios are also quite good at 1.57 and 0.55, respectively. The 5 year median values for these ratios are 1.70 and 0.70.
The Return on Equity is one place for 2011 the rate was not hot. It was only 6.6%. However, the 5 year ROE is much better at 12.4%. You want the 5 year median to be at 10% or higher. The ROE on comprehensive income is pretty close to the ROE on net income.
There are two classes of shares. Class A common shares is the subordinate voting shares and Class B common shares has with four votes per share. Class B shares are convertible into Class A subordinate voting shares on a one-for-one basis.
This company has good growth and a nice dividend. I just bought some of this stock as my main purchase with my new money into my TFSA for 2013. I bought some more Automodular Corp (TSX-AM) as my fuller stock purchase (that is to soak up the excess money left in my TFSA after my main purchase.) I intend to have some fun with my TFSA. Since I am already living off my dividends the TFSA will not be adding much to my income for some time.
Please note that this is an industrial stock and it is rather a small company, so the risk level would be rather high.
Hammond Power Solutions Inc. is the largest manufacturer of dry-type transformers in North America. They engineer and manufacture a wide range of custom transformers that are exported globally in electrical equipment and systems. They support solid industries such as oil and gas, mining, steel, waste and water treatment, and wind power-generation. Its web site is here Hammond Power Solutions. See my spreadsheet at hps.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 or StockTwits.
This stock was recommended by Ryan Irvine of Keystone Financial. He said to expect volatility, but that the stock will be a good long-term buy over the next one to three years. He expects the company will change from a semi-annual dividend to a quarterly one in 2013. I have reviewing it as Ryan Irvine has suggested some very good stocks in the past.
First I will answer the question of whether or not it has made money for its shareholders. Well, the last 5 years have not been great. Total return is just 3.9% per year. It hit a high in 2007 and was hard hit by the recent recession. Since this an industrial company, this is not surprising. However, if you look at the return over the past 10 years, it is at 25.8% per year.
Since dividends only started in 2009, not much of the above total returns are from dividends. Over the past 10 years, it is just 0.72% and over the past 5 years, it is at 1%. Although current dividend yield is 2.2%, over the past 3 years, the median is just 1.27%. The other side of the coin is that dividends have risen by 22.5% per year over the past 2 years since they have been started. For 2012, the dividends have increased by 20%.
If these increases continue, then the potential future in dividends looks good. Using the current dividend yield of 2.2% and increase of 20% a year, you could be earning almost a 14% yield on stock purchases today in 10 years. In 15 years, you could have a yield 34% on a stock purchased today.
The next question has to do with Dividend Payout Ratios, or can the company afford the dividends? This is a definite yes. The DPRs for earnings over the past 3 years is 15.7%. The DPRs for Cash Flow is 10%. (See my site for information on Dividend Payout Ratios).
The next question is about the strength of the balance sheet (or if you prefer the debt ratios). The current Liquidity Ratios are great. The 5 year median Liquidity Ratio is 2.18. The current one is a bit lower at 1.75. However, they are above the 1.50 I like. The Debt Ratio is also good. The current one is 2.84 and the 5 year median is 2.98.
The current Leverage and Debt/Equity Ratios are also quite good at 1.57 and 0.55, respectively. The 5 year median values for these ratios are 1.70 and 0.70.
The Return on Equity is one place for 2011 the rate was not hot. It was only 6.6%. However, the 5 year ROE is much better at 12.4%. You want the 5 year median to be at 10% or higher. The ROE on comprehensive income is pretty close to the ROE on net income.
There are two classes of shares. Class A common shares is the subordinate voting shares and Class B common shares has with four votes per share. Class B shares are convertible into Class A subordinate voting shares on a one-for-one basis.
This company has good growth and a nice dividend. I just bought some of this stock as my main purchase with my new money into my TFSA for 2013. I bought some more Automodular Corp (TSX-AM) as my fuller stock purchase (that is to soak up the excess money left in my TFSA after my main purchase.) I intend to have some fun with my TFSA. Since I am already living off my dividends the TFSA will not be adding much to my income for some time.
Please note that this is an industrial stock and it is rather a small company, so the risk level would be rather high.
Hammond Power Solutions Inc. is the largest manufacturer of dry-type transformers in North America. They engineer and manufacture a wide range of custom transformers that are exported globally in electrical equipment and systems. They support solid industries such as oil and gas, mining, steel, waste and water treatment, and wind power-generation. Its web site is here Hammond Power Solutions. See my spreadsheet at hps.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 or StockTwits.
Wednesday, January 2, 2013
TMX Group Ltd
On my other blog I am today writing about the US Fiscal Cliff...continue...
I do not own this stock of TMX Group Ltd (TSX-X, OTC-TMXXF). I have not reviewed this stock for a while because it was supposed to be involved in a takeover. However, it would seem that TMX Group Inc. was taken over the TMX Group Ltd and shareholders got a share trade of 1 for 1. However this was after TMX Group Ltd (formerly Maple Group) bought 80% of the outstanding shares of TMX Group Inc.
I am doing a short report on this stock. Basically, I track too many stocks to do two reports on each stock. Also, there is not much to say on this stock. It is hard to tell how much continuity there is between the old TMX Group Inc. and the current TMX Group Ltd. companies.
I would not invest in this company. First of all the debt ratios have never been great for this company, especially the Liquidity Ratio. I do not like companies with low Liquidity Ratios, especially when they do not have strong and stable cash flows. (The 5 year median Liquidity Ratio with cash flow after dividends is just 1.16. The Ratio just is not high enough.)
With the change to TMX Group Ltd., the debt ratios have not improved. The Liquidity Ratio for the 3rd quarter is 1.07 a rather low value. The Debt Ratio is also low at just 1.42. I like to see these ratios at 1.50 or higher.
Also, with the 3rd quarter, I notice that goodwill and intangible assets are 180% of the market cap of the stock. This is not good.
Reading the 3rd quarterly report, they seem to be starting the accounting all over again from the time of exchange on September 14th. Where they are at may become clearer by the end of financial year of 2012 reporting. If not, I might just drop tracking this stock.
The analysts' recommendations for this stock are Strong Buy, Buy, Hold and Underperform and Sell. In other words they are all over the place. The consensus recommendations would be a Hold. Most recommendations are a Hold. (See my site for information on analyst ratings.)
The 12 months stock price consensus is $51.50. Since the stock price is currently $51.00 this implies return of only dividends over the next year.
It would seem that analysts do not see much growth in stock price over the next 12 months and therefore give this stock a Hold recommendation. One analyst said the business is going nowhere and is not growing. In fact new listings are shrinking volume is going down. There is an articleFinancial Post about an analyst downgrade on this stock because of lower trading volumes.
There is also an article on Stockhouse which talks about the integration of Alpha Trading and CDS businesses just bought and 3rd quarter results. See Stockhouse.
I do not like the debt ratios, although I must say that growth rates (revenues, earnings, cash flow, and book value) are fine. The Goodwill and intangible assets are 180% of market cap. This is not good. Price could be on the high side as the current dividend yield is 3.15% and the 5 year median dividend yield is 4.17%, a value also 25% higher.
I just came across “How to health-check a dividend-paying company” as one subject of the Daily Buy-Sell advisor . This article talks about why debt ratios are important.
TMX Group Ltd. operates 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 North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, a fixed income inter-dealer broker. Its web site is here TMX. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock of TMX Group Ltd (TSX-X, OTC-TMXXF). I have not reviewed this stock for a while because it was supposed to be involved in a takeover. However, it would seem that TMX Group Inc. was taken over the TMX Group Ltd and shareholders got a share trade of 1 for 1. However this was after TMX Group Ltd (formerly Maple Group) bought 80% of the outstanding shares of TMX Group Inc.
I am doing a short report on this stock. Basically, I track too many stocks to do two reports on each stock. Also, there is not much to say on this stock. It is hard to tell how much continuity there is between the old TMX Group Inc. and the current TMX Group Ltd. companies.
I would not invest in this company. First of all the debt ratios have never been great for this company, especially the Liquidity Ratio. I do not like companies with low Liquidity Ratios, especially when they do not have strong and stable cash flows. (The 5 year median Liquidity Ratio with cash flow after dividends is just 1.16. The Ratio just is not high enough.)
With the change to TMX Group Ltd., the debt ratios have not improved. The Liquidity Ratio for the 3rd quarter is 1.07 a rather low value. The Debt Ratio is also low at just 1.42. I like to see these ratios at 1.50 or higher.
Also, with the 3rd quarter, I notice that goodwill and intangible assets are 180% of the market cap of the stock. This is not good.
Reading the 3rd quarterly report, they seem to be starting the accounting all over again from the time of exchange on September 14th. Where they are at may become clearer by the end of financial year of 2012 reporting. If not, I might just drop tracking this stock.
The analysts' recommendations for this stock are Strong Buy, Buy, Hold and Underperform and Sell. In other words they are all over the place. The consensus recommendations would be a Hold. Most recommendations are a Hold. (See my site for information on analyst ratings.)
The 12 months stock price consensus is $51.50. Since the stock price is currently $51.00 this implies return of only dividends over the next year.
It would seem that analysts do not see much growth in stock price over the next 12 months and therefore give this stock a Hold recommendation. One analyst said the business is going nowhere and is not growing. In fact new listings are shrinking volume is going down. There is an articleFinancial Post about an analyst downgrade on this stock because of lower trading volumes.
There is also an article on Stockhouse which talks about the integration of Alpha Trading and CDS businesses just bought and 3rd quarter results. See Stockhouse.
I do not like the debt ratios, although I must say that growth rates (revenues, earnings, cash flow, and book value) are fine. The Goodwill and intangible assets are 180% of market cap. This is not good. Price could be on the high side as the current dividend yield is 3.15% and the 5 year median dividend yield is 4.17%, a value also 25% higher.
I just came across “How to health-check a dividend-paying company” as one subject of the Daily Buy-Sell advisor . This article talks about why debt ratios are important.
TMX Group Ltd. operates 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 North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, a fixed income inter-dealer broker. Its web site is here TMX. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Monday, December 31, 2012
Mullen Group Ltd 2
On my other blog I am today writing about being asked for money all the time continue...
I do not own this stock of Mullen Group Ltd (TSX-MTL, OTC-MLLGF). This is a small stock that I saw recommended in 2010. I have not invested in this stock, but I like to look at recommended small cap dividend paying stock to see if they would be a possibly good investment now or in the future. The other thing to mention about this stock is that it has converted from an income trust and has decreased it dividends.
Over the past year according to insider trading report, there was no insider selling and only $0.2M in insider buying. Both the co-CEOs have kept recently exercised options. The co-CEOs have more shares than options with one co-CEO having $53M in shares and $5.3M in options, and the other having $8.9M in shares and $1M in options.
The CFO does not have much in shares or options. The Directors have some shares and no options. Some 74 institutions hold 31% of the outstanding shares. Over the past 3 months they have reduced their shares by around 1%.
The 5 year low, median and high median Price/Earnings Ratios are 8.27, 11.94 and 15.73. The current P/E Ratio is 12.74 based on a stock price of $21.22 and 2012 earnings of $1.64. This shows that the stock price is reasonable, but not cheap.
I get a Graham Price of $19.34. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.09 and 1.35. The current P/GP Ratio is 1.10. This shows that the stock price is reasonable, but not cheap. (See my site for information on calculating Graham Price.)
I get a 10 year median Price/Book Value per Share Ratio of 1.61. The current P/B Ratio is 2.09, a value some 30% higher. This ratio suggests that the stock price is on the high side. However, the book value recently dropped due to the change in accounting rules to IFRS.
I get a 5 year median dividend yield of 4.44%. The current dividend yield at 4.71% is some 6% higher. This suggests that the stock price is relatively reasonable.
When I look at analysts' recommendations, I get Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation is a Hold. Most of the recommendations are in the Hold category. The 12 month consensus stock price is $24.10. This implies total returns of 18.28% with 4.71% from dividends and 13.57% from capital gains.
Even though analysts expect to see growth in earnings and cash flow for 2013, they seem to be cautious because this company is closely tied to the Oil Sands. They think that there is room for an increased dividend, but the company may be cautious about increasing the dividends because of uncertainty surrounding the Oil Sands. Analysts seem to think that the price will rise when this company increases the dividend. Analysts think of this company as being well managed.
However, for the company to do very well in the future oil prices need to rise and there needs to be more demand for gas. The company has recently agreed to provide oilfield services for oil and gas fields in the Northwest Territories. See truckers' forum.
There was some recent downgrades and upgrades to on this stock shown at Daily Political. The happy capitalism blogger also reviewed this stock within the past year.
This stock has a nice dividend of 4.7% and price is reasonable.
Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen. See my spreadsheet at mtl.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 or StockTwits.
I do not own this stock of Mullen Group Ltd (TSX-MTL, OTC-MLLGF). This is a small stock that I saw recommended in 2010. I have not invested in this stock, but I like to look at recommended small cap dividend paying stock to see if they would be a possibly good investment now or in the future. The other thing to mention about this stock is that it has converted from an income trust and has decreased it dividends.
Over the past year according to insider trading report, there was no insider selling and only $0.2M in insider buying. Both the co-CEOs have kept recently exercised options. The co-CEOs have more shares than options with one co-CEO having $53M in shares and $5.3M in options, and the other having $8.9M in shares and $1M in options.
The CFO does not have much in shares or options. The Directors have some shares and no options. Some 74 institutions hold 31% of the outstanding shares. Over the past 3 months they have reduced their shares by around 1%.
The 5 year low, median and high median Price/Earnings Ratios are 8.27, 11.94 and 15.73. The current P/E Ratio is 12.74 based on a stock price of $21.22 and 2012 earnings of $1.64. This shows that the stock price is reasonable, but not cheap.
I get a Graham Price of $19.34. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.09 and 1.35. The current P/GP Ratio is 1.10. This shows that the stock price is reasonable, but not cheap. (See my site for information on calculating Graham Price.)
I get a 10 year median Price/Book Value per Share Ratio of 1.61. The current P/B Ratio is 2.09, a value some 30% higher. This ratio suggests that the stock price is on the high side. However, the book value recently dropped due to the change in accounting rules to IFRS.
I get a 5 year median dividend yield of 4.44%. The current dividend yield at 4.71% is some 6% higher. This suggests that the stock price is relatively reasonable.
When I look at analysts' recommendations, I get Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation is a Hold. Most of the recommendations are in the Hold category. The 12 month consensus stock price is $24.10. This implies total returns of 18.28% with 4.71% from dividends and 13.57% from capital gains.
Even though analysts expect to see growth in earnings and cash flow for 2013, they seem to be cautious because this company is closely tied to the Oil Sands. They think that there is room for an increased dividend, but the company may be cautious about increasing the dividends because of uncertainty surrounding the Oil Sands. Analysts seem to think that the price will rise when this company increases the dividend. Analysts think of this company as being well managed.
However, for the company to do very well in the future oil prices need to rise and there needs to be more demand for gas. The company has recently agreed to provide oilfield services for oil and gas fields in the Northwest Territories. See truckers' forum.
There was some recent downgrades and upgrades to on this stock shown at Daily Political. The happy capitalism blogger also reviewed this stock within the past year.
This stock has a nice dividend of 4.7% and price is reasonable.
Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen. See my spreadsheet at mtl.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 or StockTwits.
Friday, December 28, 2012
Mullen Group Ltd
I do not own this stock of Mullen Group Ltd (TSX-MTL, OTC-MLLGF). This is a small stock that I saw recommended in 2010. I have not invested in this stock, but I like to look at recommended small cap dividend paying stock to see if they would be a possibly good investment now or in the future. The other thing to mention about this stock is that it has converted from an income trust and has decreased it dividends.
In 2009, dividends were decreased some 83%. Since then they have increased the dividends every year and they are up some 233%. Their last increase was in 2011 and it was a 100% increase in dividends. There was no increase in 2012. Dividends are still some 45% lower in 2012 than at the top dividend of 2008.
It was felt that old income trusts companies would end up with dividend yields between 4 and 5%. This company is in that range with a current dividend yield of 4.2%. Dividend Payout Ratios are good with the 5 year median DPR for EPS at 61%, the 5 year median DPR for CFPS at 42% and the 5 year median DPR for adjusted CFPS at 27%.
The total return over the past 5 and 10 years is 4.12% and 13.92% per year, respectively. The dividend portion of the 5 year return is 6.06% per year and there is a capital loss of 1.94% per year. The dividend portion of the 10 year return is 6.56% per year and the capital gain portion is 7.36% per year. They have made money for their shareholders, especially over the longer term.
The outstanding shares have decreased by 0.2% per year over the past 5 years and increased by 6.42% per year over the past 10 years. Shares have increased because of acquisitions and stock options being exercised. They have decreased because of stock repurchases.
Revenue and revenue per share growth is generally good, with revenue growth at 68% per year over the past 5 years and 15% per year over the past 10 years. Revenue per share has grown at the rate of 68% per year over the past 5 years and 7.8% over the past 10 years.
Earnings per Share is down over the past 5 years by 5% per year and up by 7.6% per year over the past 10 years. This is an industrial stock, so looking at EPS on a 5 year running average, the stock does better with EPS up by 4.3% per year over the past 5 years and up by 11% per year over the past 10 years. Why I am looking at the 5 year running average is because for industrial stocks, EPS does tend to fluctuate.
Cash Flow per Share will also fluctuate. The Adjusted CFPS is up by 6% and 12% per year, over the past 5 and 10 years. The 5 year running average Adjusted CFPS is up by 8.7% and 13% per year over the past 5 and 10 years.
Book Value has not fared well over the past 5 years and BVPS is down some 13% per year. However, it is up by 7.8% per year over the past 10 years. Book value went down some 42% with the change in Accounting Rules to IFRS. If the IFRS accounting rules were used in 2010, Book Value would have increased.
For the financial year of 2011, the ROE was 17.1%. However, the 5 year median ROE was much lower at 7.8%. The financial year of 2011 was a good year and it is expected that the financial year of 2012 will be better. The ROE based on comprehensive income was the same as that for net income.
The current Liquidity Ratio is very good at 2.33 and the current debt ratio is also very good at 2.11. I like to see good debt ratios on industrial stocks because it shows they have a good chance of surviving in the bad times. The current Leverage and Debt/Equity Ratios are also good at 1.91 and 0.90.
You would buy this stock for diversification purposes. Because it is an industrial stock, earnings and cash flow will fluctuate. Most companies will try not to have fluctuating dividends. I like the strong balance sheet this company has. They are making a profit and shareholders are earning money.
Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen. See my spreadsheet at mtl.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 or StockTwits.
In 2009, dividends were decreased some 83%. Since then they have increased the dividends every year and they are up some 233%. Their last increase was in 2011 and it was a 100% increase in dividends. There was no increase in 2012. Dividends are still some 45% lower in 2012 than at the top dividend of 2008.
It was felt that old income trusts companies would end up with dividend yields between 4 and 5%. This company is in that range with a current dividend yield of 4.2%. Dividend Payout Ratios are good with the 5 year median DPR for EPS at 61%, the 5 year median DPR for CFPS at 42% and the 5 year median DPR for adjusted CFPS at 27%.
The total return over the past 5 and 10 years is 4.12% and 13.92% per year, respectively. The dividend portion of the 5 year return is 6.06% per year and there is a capital loss of 1.94% per year. The dividend portion of the 10 year return is 6.56% per year and the capital gain portion is 7.36% per year. They have made money for their shareholders, especially over the longer term.
The outstanding shares have decreased by 0.2% per year over the past 5 years and increased by 6.42% per year over the past 10 years. Shares have increased because of acquisitions and stock options being exercised. They have decreased because of stock repurchases.
Revenue and revenue per share growth is generally good, with revenue growth at 68% per year over the past 5 years and 15% per year over the past 10 years. Revenue per share has grown at the rate of 68% per year over the past 5 years and 7.8% over the past 10 years.
Earnings per Share is down over the past 5 years by 5% per year and up by 7.6% per year over the past 10 years. This is an industrial stock, so looking at EPS on a 5 year running average, the stock does better with EPS up by 4.3% per year over the past 5 years and up by 11% per year over the past 10 years. Why I am looking at the 5 year running average is because for industrial stocks, EPS does tend to fluctuate.
Cash Flow per Share will also fluctuate. The Adjusted CFPS is up by 6% and 12% per year, over the past 5 and 10 years. The 5 year running average Adjusted CFPS is up by 8.7% and 13% per year over the past 5 and 10 years.
Book Value has not fared well over the past 5 years and BVPS is down some 13% per year. However, it is up by 7.8% per year over the past 10 years. Book value went down some 42% with the change in Accounting Rules to IFRS. If the IFRS accounting rules were used in 2010, Book Value would have increased.
For the financial year of 2011, the ROE was 17.1%. However, the 5 year median ROE was much lower at 7.8%. The financial year of 2011 was a good year and it is expected that the financial year of 2012 will be better. The ROE based on comprehensive income was the same as that for net income.
The current Liquidity Ratio is very good at 2.33 and the current debt ratio is also very good at 2.11. I like to see good debt ratios on industrial stocks because it shows they have a good chance of surviving in the bad times. The current Leverage and Debt/Equity Ratios are also good at 1.91 and 0.90.
You would buy this stock for diversification purposes. Because it is an industrial stock, earnings and cash flow will fluctuate. Most companies will try not to have fluctuating dividends. I like the strong balance sheet this company has. They are making a profit and shareholders are earning money.
Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen. See my spreadsheet at mtl.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 or StockTwits.
Thursday, December 27, 2012
Stella-Jones Inc 2
First, I have reloaded the index to the stocks that I cover on my blog. You can use your mouse to highlight a line in this index.
Secondly, on my other blog I am today writing about Christmas day dinner at Azure continue...
I do not own this stock Stella-Jones Inc. (TSX-SJ, OTC-STLJF). In 2009 I had read a favorable report on this stock and decided to follow it. This company is considered to be a dividend growth company. The main characteristics are low dividend yield, but high dividend growth.
The insider trading report shows $2.3M of insider selling during the past year and no insider buying. Insider selling seems to be all the exercise of options. Options are often thought of as part of salary. The company is also buying back shares for cancellation.
Insider ownership is a bit complex, but it is at 42% of outstanding shares. As far as holding by CFO, he has $2M in shares and $3.8M in options. The CFO has $50,000 in shares in $0.4M in options. Insiders not only have options, but option like vehicles like Restricted Stock Units. Quite a number of people have these options, but there is not a great deal outstanding.
There seems to be about 32 institutions that hold 36% of the outstanding shares. Over the past 3 months they have, very marginally, decreased their holdings.
The 5 year low, median and high median Price/Earnings Ratios are 9.24, 12 and 14.73. The current P/E Ratio is 17.16 based on stock price of $76.35 and 2012 earnings of $4.45. This rather high ratio suggests that the stock price is relatively high. The P/E has been this high and higher previous when it was hitting peaks (like in 2008).
I get a Graham Price of $48.38. The 10 year low, median and high median Price/Graham Price ratios are 0.54, 0.87 and 1.07. The current P/GP ratio is 1.48 and this rather high ratio suggests that the stock price is relatively high.
The 10 year median Price/Book Value per Share is 1.85 and the current P/BV Ratio is 3.27. This current ratio is 77% higher than the 10 year median ratio and this high ratio suggests that the stock price is relatively high.
The current dividend yield is 0.84% and the 5 year median dividend yield is 1.31%. The current yield is 36% lower than the 5 year median. This low dividend yield suggests that the stock price is relatively high.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. (This is the typical recommendation for a stock.) The 12 months consensus stock price is $84.60. This implies a total return of 11.65%, with 10.84% from capital gains and 0.84% from dividends.
The Financial Post talks about a new acquisition by Stella-Jones. This is the biggest acquisition to date for Stella-Jones. One analyst mentioned that this is an infrastructure play. Daily Political talks about some analysts upgrades for Stella-Jones.
Proactive Investors talked about 2nd quarterly profits for Stella-Jones up 20% and the increase in the quarterly dividend.
Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella Jones. See my spreadsheet at sj.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 or StockTwits.
Secondly, on my other blog I am today writing about Christmas day dinner at Azure continue...
I do not own this stock Stella-Jones Inc. (TSX-SJ, OTC-STLJF). In 2009 I had read a favorable report on this stock and decided to follow it. This company is considered to be a dividend growth company. The main characteristics are low dividend yield, but high dividend growth.
The insider trading report shows $2.3M of insider selling during the past year and no insider buying. Insider selling seems to be all the exercise of options. Options are often thought of as part of salary. The company is also buying back shares for cancellation.
Insider ownership is a bit complex, but it is at 42% of outstanding shares. As far as holding by CFO, he has $2M in shares and $3.8M in options. The CFO has $50,000 in shares in $0.4M in options. Insiders not only have options, but option like vehicles like Restricted Stock Units. Quite a number of people have these options, but there is not a great deal outstanding.
There seems to be about 32 institutions that hold 36% of the outstanding shares. Over the past 3 months they have, very marginally, decreased their holdings.
The 5 year low, median and high median Price/Earnings Ratios are 9.24, 12 and 14.73. The current P/E Ratio is 17.16 based on stock price of $76.35 and 2012 earnings of $4.45. This rather high ratio suggests that the stock price is relatively high. The P/E has been this high and higher previous when it was hitting peaks (like in 2008).
I get a Graham Price of $48.38. The 10 year low, median and high median Price/Graham Price ratios are 0.54, 0.87 and 1.07. The current P/GP ratio is 1.48 and this rather high ratio suggests that the stock price is relatively high.
The 10 year median Price/Book Value per Share is 1.85 and the current P/BV Ratio is 3.27. This current ratio is 77% higher than the 10 year median ratio and this high ratio suggests that the stock price is relatively high.
The current dividend yield is 0.84% and the 5 year median dividend yield is 1.31%. The current yield is 36% lower than the 5 year median. This low dividend yield suggests that the stock price is relatively high.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. (This is the typical recommendation for a stock.) The 12 months consensus stock price is $84.60. This implies a total return of 11.65%, with 10.84% from capital gains and 0.84% from dividends.
The Financial Post talks about a new acquisition by Stella-Jones. This is the biggest acquisition to date for Stella-Jones. One analyst mentioned that this is an infrastructure play. Daily Political talks about some analysts upgrades for Stella-Jones.
Proactive Investors talked about 2nd quarterly profits for Stella-Jones up 20% and the increase in the quarterly dividend.
Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella Jones. See my spreadsheet at sj.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 or StockTwits.
Monday, December 24, 2012
Stella-Jones Inc
I wish everyone a Merry Christmas. I will post next on Thursday, December 27th 2012.
On my other blog I am today writing about Dividend Growth companies and I am comparing Chesswood Group (TSX-CHW) to Stella Jones Inc.(TSX-SJ)...continue...
I do not own this stock Stella-Jones Inc. (TSX-SJ, OTC-STLJF). In 2009 I had read a favorable report on this stock and decided to follow it. This company is considered to be a dividend growth company. The main characteristics are low dividend yield, but high dividend growth.
Dividends are certainly low as the 5 year median is 1.31% and the current one is just 0.84%. Dividend growth is very good at 29% per year over the past 5 year and 24.4% per year over the past 10 years. If you bought this stock today, you could expect to have a yield on your original purchase price of 21% in 15 years with dividend increases at 24% per year. ). (See my site for information on buying Dividend Growth Stocks.)
The Dividend Payout Ratios are very good. The DPR for earnings is 15% and for cash flow is 11%. Growing companies do not like to pay out much of their earnings as they need their earnings for growth.
Total return over the past 5 years is not great and this is not surprising. This is an industrial company and would have been hit in the last recession. The total return over the past 5 years is 4.3% per year with capital gain of 3.32% per year and dividends at 0.98% per year. However, total return over the past 10 years is very good at 37.9% per year, with capital gain at 35.1% per year and dividends at 2.4% per year.
The outstanding shares have increased by 5.3% and 5.8% per year over the past 5 and 10 years. Most of the increase is due to acquisitions, but there are small increases due to stock options also.
Revenues are up 23.4% per year and 22% per year over the past 5 and 10 years. Revenues per Share are up by 17% and 15% per year over the past 5 and 10 years. Both rates of growth are quite good.
Earnings per Share are up by 14.6% and 53% per year over the past 5 and 10 years. Cash Flow per Share is up by 15% and 29% per year over the past 5 and 10 years. Book Value per Share is up 19.3% and 19.5% per year over the past 5 and 10 years. All these growth rates are also quite good.
The Return on Equity is also good with the one for the financial year of 2011 at 16.8% and with a 5 year median ROE of 16.8%. The ROE on comprehensive income is similar with the one for the financial year of 2011 at 17.7% and the 5 year median ROE at 17.4%.
All the debt ratios are very good with the current Liquidity Ratio at 5.96 and the current Debt Ratio at 2.16. The current Leverage and Debt/Equity Ratios are 1.77 and 0.77.
There is lots of insider ownership and this is probably the reason for the high debt ratios. It is an industrial stock and having high debt ratios will see it through the bad times. It is an excellent idea to my mind.
Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella Jones. See my spreadsheet at sj.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 or StockTwits.
On my other blog I am today writing about Dividend Growth companies and I am comparing Chesswood Group (TSX-CHW) to Stella Jones Inc.(TSX-SJ)...continue...
I do not own this stock Stella-Jones Inc. (TSX-SJ, OTC-STLJF). In 2009 I had read a favorable report on this stock and decided to follow it. This company is considered to be a dividend growth company. The main characteristics are low dividend yield, but high dividend growth.
Dividends are certainly low as the 5 year median is 1.31% and the current one is just 0.84%. Dividend growth is very good at 29% per year over the past 5 year and 24.4% per year over the past 10 years. If you bought this stock today, you could expect to have a yield on your original purchase price of 21% in 15 years with dividend increases at 24% per year. ). (See my site for information on buying Dividend Growth Stocks.)
The Dividend Payout Ratios are very good. The DPR for earnings is 15% and for cash flow is 11%. Growing companies do not like to pay out much of their earnings as they need their earnings for growth.
Total return over the past 5 years is not great and this is not surprising. This is an industrial company and would have been hit in the last recession. The total return over the past 5 years is 4.3% per year with capital gain of 3.32% per year and dividends at 0.98% per year. However, total return over the past 10 years is very good at 37.9% per year, with capital gain at 35.1% per year and dividends at 2.4% per year.
The outstanding shares have increased by 5.3% and 5.8% per year over the past 5 and 10 years. Most of the increase is due to acquisitions, but there are small increases due to stock options also.
Revenues are up 23.4% per year and 22% per year over the past 5 and 10 years. Revenues per Share are up by 17% and 15% per year over the past 5 and 10 years. Both rates of growth are quite good.
Earnings per Share are up by 14.6% and 53% per year over the past 5 and 10 years. Cash Flow per Share is up by 15% and 29% per year over the past 5 and 10 years. Book Value per Share is up 19.3% and 19.5% per year over the past 5 and 10 years. All these growth rates are also quite good.
The Return on Equity is also good with the one for the financial year of 2011 at 16.8% and with a 5 year median ROE of 16.8%. The ROE on comprehensive income is similar with the one for the financial year of 2011 at 17.7% and the 5 year median ROE at 17.4%.
All the debt ratios are very good with the current Liquidity Ratio at 5.96 and the current Debt Ratio at 2.16. The current Leverage and Debt/Equity Ratios are 1.77 and 0.77.
There is lots of insider ownership and this is probably the reason for the high debt ratios. It is an industrial stock and having high debt ratios will see it through the bad times. It is an excellent idea to my mind.
Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella Jones. See my spreadsheet at sj.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 or StockTwits.
Friday, December 21, 2012
Chesswood Group Ltd
I do not own this stock Chesswood Group (TSX-CHW, OTC- CHWWF). In the next paragraph is the hype for the stock and then after than I will talk about what I found.
A reader wrote me that he was researching and found a company that he hoped I could give me a brief outlook on. He said that the company is Chesswood Group (TSX-CHW) and they are basically a financial leasing company. In 2009 they increased dividends from 2.5 to 3.0 cents per month. In 2010 they increased dividends to 3.5 and to 4.0 and to 4.5. In 2011 they increased dividends to 5.0 and this year increased again to 5.5 per month. He writes that he knows I like that sort of a trend. He also said that they do not appear to have much long term debt but in 2011 seemed to really increase leasing obligations and in 2011 cash flow was negative. Currently they are yielding about 7.5%
So, let's first look at the dividends. The dividends were increased since 2009. However, what is not mentioned is that dividends were decreased by 74% over 2008 and 2009. The 5 year dividend growth rate is a negative 6.7% per year. This is not a good sign.
This company does not have growing dividends; rather the dividends have tended to fluctuate. This may change since they are no longer an income trust, but I do not know.
Next question is "Can they afford the dividends being paid?" The basic answer is no. The best year was 2010 when the Dividend Payout Ratio was 67%. It was 106% in 2011. Mostly, they either paid out too much money or they made no money to pay out. This is another bad sign.
They have done better in the Dividend Payout Ratio for cash flow per share, with the ratio around 23%. However, this stock is no longer an Income Trust and earning a profit does become important. They just increased the dividends by 10% in 2012. However, cash flow, over the past 5 years has grown at the rate of 5.72%. You cannot increase dividends faster than cash flow and EPS grows.
Next, has it made any money for the shareholders? To the end of December 2011, the total return was 6.09% per year, with 9% per year from dividends and a capital loss of 2.9% per year. Share prices are up sharply during the current year by 42.9%.
Next thing to look at is debt ratios. For this company, the Liquidity Ratios are not easy to come by as they do not give you current assets and liabilities in their statements. I was depending on others sites and doing my own calculations. Liquidity Ratios have been rather low with a 5 year median of just 1.18. Sometimes they have had good cash flow and sometimes not so much. This is not good.
If you do not have good Liquidity Ratios you need a strong and growing cash flow. This company seems to have a fluctuating cash flow. Cash flow therefore does not seem to be able to overcome low Liquidity Ratios.
The Debt Ratios are acceptable, with the 5 year median being 1.55. The current one seems to be at 1.61. A Debt Ratio of 1.50 or above is acceptable. The current Leverage is a little high at 3.14 and Debt/Equity Ratios are ok at 1.96.
It would be a plus if management had a significant ownership in this company. However, the CEO owns shares worth $0.8M (less than 1% of outstanding shares) and options worth $5.9M. The CFO has shares worth $0.3M and options worth $1.6M. The only significant ownership I can find is by Edward Sonshine who is an Advisor to the Board. He has shares worth $12.2M and almost 14% of the outstanding shares.
There does not seem to be much in the way of institutional ownership. Just under 5% of the shares are owned by 4 institutions. They have decreased their ownership by 18% over the past 3 months. This is not good.
There seems to be one analyst that is following this stock and his rating is a buy. He gives a 12 months stock price of $10.50 with 7.33% from dividends and 16.67 from capital gain. He expects sales to rise over the next two years, and with rising says he expects rising EPS. Over the past 5 years, Revenue has increased by 2.53% per year. However, revenue per share has fallen 3.51% per year. Not a great performance so far.
The future is just speculation. There is nothing in the past that supports it as far as I can see.
Chesswood Group Limited is a financial services company operating primarily in the specialty finance industry. Chesswood's approach is to acquire financial services businesses. It owns Pawnee Leasing Corporation, located in Fort Collins, Colorado, is Chesswood's largest operating company. Pawnee's assets comprise approximately 75% of Chesswood's consolidated assets. Chesswood recently added Case Funding Inc., a U.S. legal finance company, to its specialty finance portfolio. Chesswood owns of one of the larger Acura dealers in Canada, Acura Sherway, in addition to Canada's only eDealer, cars4U.com. Its web site is here Chesswood Group. See my spreadsheet at chw.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 or StockTwits.
A reader wrote me that he was researching and found a company that he hoped I could give me a brief outlook on. He said that the company is Chesswood Group (TSX-CHW) and they are basically a financial leasing company. In 2009 they increased dividends from 2.5 to 3.0 cents per month. In 2010 they increased dividends to 3.5 and to 4.0 and to 4.5. In 2011 they increased dividends to 5.0 and this year increased again to 5.5 per month. He writes that he knows I like that sort of a trend. He also said that they do not appear to have much long term debt but in 2011 seemed to really increase leasing obligations and in 2011 cash flow was negative. Currently they are yielding about 7.5%
So, let's first look at the dividends. The dividends were increased since 2009. However, what is not mentioned is that dividends were decreased by 74% over 2008 and 2009. The 5 year dividend growth rate is a negative 6.7% per year. This is not a good sign.
This company does not have growing dividends; rather the dividends have tended to fluctuate. This may change since they are no longer an income trust, but I do not know.
Next question is "Can they afford the dividends being paid?" The basic answer is no. The best year was 2010 when the Dividend Payout Ratio was 67%. It was 106% in 2011. Mostly, they either paid out too much money or they made no money to pay out. This is another bad sign.
They have done better in the Dividend Payout Ratio for cash flow per share, with the ratio around 23%. However, this stock is no longer an Income Trust and earning a profit does become important. They just increased the dividends by 10% in 2012. However, cash flow, over the past 5 years has grown at the rate of 5.72%. You cannot increase dividends faster than cash flow and EPS grows.
Next, has it made any money for the shareholders? To the end of December 2011, the total return was 6.09% per year, with 9% per year from dividends and a capital loss of 2.9% per year. Share prices are up sharply during the current year by 42.9%.
Next thing to look at is debt ratios. For this company, the Liquidity Ratios are not easy to come by as they do not give you current assets and liabilities in their statements. I was depending on others sites and doing my own calculations. Liquidity Ratios have been rather low with a 5 year median of just 1.18. Sometimes they have had good cash flow and sometimes not so much. This is not good.
If you do not have good Liquidity Ratios you need a strong and growing cash flow. This company seems to have a fluctuating cash flow. Cash flow therefore does not seem to be able to overcome low Liquidity Ratios.
The Debt Ratios are acceptable, with the 5 year median being 1.55. The current one seems to be at 1.61. A Debt Ratio of 1.50 or above is acceptable. The current Leverage is a little high at 3.14 and Debt/Equity Ratios are ok at 1.96.
It would be a plus if management had a significant ownership in this company. However, the CEO owns shares worth $0.8M (less than 1% of outstanding shares) and options worth $5.9M. The CFO has shares worth $0.3M and options worth $1.6M. The only significant ownership I can find is by Edward Sonshine who is an Advisor to the Board. He has shares worth $12.2M and almost 14% of the outstanding shares.
There does not seem to be much in the way of institutional ownership. Just under 5% of the shares are owned by 4 institutions. They have decreased their ownership by 18% over the past 3 months. This is not good.
There seems to be one analyst that is following this stock and his rating is a buy. He gives a 12 months stock price of $10.50 with 7.33% from dividends and 16.67 from capital gain. He expects sales to rise over the next two years, and with rising says he expects rising EPS. Over the past 5 years, Revenue has increased by 2.53% per year. However, revenue per share has fallen 3.51% per year. Not a great performance so far.
The future is just speculation. There is nothing in the past that supports it as far as I can see.
Chesswood Group Limited is a financial services company operating primarily in the specialty finance industry. Chesswood's approach is to acquire financial services businesses. It owns Pawnee Leasing Corporation, located in Fort Collins, Colorado, is Chesswood's largest operating company. Pawnee's assets comprise approximately 75% of Chesswood's consolidated assets. Chesswood recently added Case Funding Inc., a U.S. legal finance company, to its specialty finance portfolio. Chesswood owns of one of the larger Acura dealers in Canada, Acura Sherway, in addition to Canada's only eDealer, cars4U.com. Its web site is here Chesswood Group. See my spreadsheet at chw.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 or StockTwits.
Thursday, December 20, 2012
Methanex Corp 2
I do not own this stock of Methanex Corp (TSX-MX, NASDAQ:-MEOH). I started reviewing this stock in 2010 because I had read some good reports on it. It also got a solid "C" grade in a money sense review of stocks in November 2010. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.
When I look at insider trading report I find $19.9M in insider selling and a net of insider sell at $16.8M. There is minimal insider buying. The selling is by all types of insiders and seems to be insiders are cashing in their options. There are lots of outstanding options and not only options but Rights Deferred Share Units, Rights Performance Share Units, Rights Share Appreciation Rights and Rights Restricted Share Units.
For example, the CEO has shares worth some $4M, but options worth almost $50M, the CFO has shares worth $0.5M and options worth almost $20M, and officer has shares worth $0.2M and options worth $1.3M and a director has minimal shares and options worth $1.1M.
According to NASDAQ site, 73% of the outstanding shares are owned by institutions. They have marginally reduced their shares in the 3 months prior to September 30, 2012.
The 5 year low, median and high median Price/Earnings Ratios are 10.23, 12.76 and 15.29. Using a stock price of $30.89 and a 2012 EPS of 1.98, I get a P/E of 15.59. This test suggests that the stock price is relatively high. However, the company has cash of $4.26 per share. If you subtract this cash per share from the current share price you get a P/E of 13.44. This P/E is still a bit high but better.
I get a Graham Price of $26.06. The 10 year low, median and high median Price/Graham price Ratios are 0.84, 1.03 and 1.23. The current P/GP Ratio is 1.19. This test shows that the stock price is on the high side, but it is reasonable.
The 10 year Price/Book Value per Share Ratio is 1.89. The current one is 2.03, a value 7% higher. This ratio shows that the stock price is not cheap, but it is reasonable.
The 5 year median dividend yield is 2.53%. The current dividend yield is 2.36%, a value 7% lower and shows that the stock price is above the relatively median stock price, but it is still reasonable. (Note the 10 year median dividend yield is 2.24%, a yield a bit below the current dividend yield.)
So all my stock prices show that the stock price is relatively on the high side, but it could still be considered a reasonable price.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $33.14. This would imply a 9.64% total return with 7.28% from capital gains and 2.36% from dividends.
One analysts with a buy rating thought that the strong cash flow would provide support for future dividend increase and/or share buybacks. One analyst would buy when there is a pull back to a stock price in the mid-$20s. A couple of analysts said that the company is very shareholder friendly. A couple analysts also remarked that this is a cyclical company.
Zacks said they were downgrading this stock to a underperform rating in August 2012. However, no site I saw recently said that any analyst had this stock in this recommendation category. According to Zolmak news, Zacks upgraded Methanex to a Hold in November 2012. A couple of other analysts recommended it as buy in this Zolmak news blog.
Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex. See my spreadsheet at mx.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 or StockTwits.
When I look at insider trading report I find $19.9M in insider selling and a net of insider sell at $16.8M. There is minimal insider buying. The selling is by all types of insiders and seems to be insiders are cashing in their options. There are lots of outstanding options and not only options but Rights Deferred Share Units, Rights Performance Share Units, Rights Share Appreciation Rights and Rights Restricted Share Units.
For example, the CEO has shares worth some $4M, but options worth almost $50M, the CFO has shares worth $0.5M and options worth almost $20M, and officer has shares worth $0.2M and options worth $1.3M and a director has minimal shares and options worth $1.1M.
According to NASDAQ site, 73% of the outstanding shares are owned by institutions. They have marginally reduced their shares in the 3 months prior to September 30, 2012.
The 5 year low, median and high median Price/Earnings Ratios are 10.23, 12.76 and 15.29. Using a stock price of $30.89 and a 2012 EPS of 1.98, I get a P/E of 15.59. This test suggests that the stock price is relatively high. However, the company has cash of $4.26 per share. If you subtract this cash per share from the current share price you get a P/E of 13.44. This P/E is still a bit high but better.
I get a Graham Price of $26.06. The 10 year low, median and high median Price/Graham price Ratios are 0.84, 1.03 and 1.23. The current P/GP Ratio is 1.19. This test shows that the stock price is on the high side, but it is reasonable.
The 10 year Price/Book Value per Share Ratio is 1.89. The current one is 2.03, a value 7% higher. This ratio shows that the stock price is not cheap, but it is reasonable.
The 5 year median dividend yield is 2.53%. The current dividend yield is 2.36%, a value 7% lower and shows that the stock price is above the relatively median stock price, but it is still reasonable. (Note the 10 year median dividend yield is 2.24%, a yield a bit below the current dividend yield.)
So all my stock prices show that the stock price is relatively on the high side, but it could still be considered a reasonable price.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $33.14. This would imply a 9.64% total return with 7.28% from capital gains and 2.36% from dividends.
One analysts with a buy rating thought that the strong cash flow would provide support for future dividend increase and/or share buybacks. One analyst would buy when there is a pull back to a stock price in the mid-$20s. A couple of analysts said that the company is very shareholder friendly. A couple analysts also remarked that this is a cyclical company.
Zacks said they were downgrading this stock to a underperform rating in August 2012. However, no site I saw recently said that any analyst had this stock in this recommendation category. According to Zolmak news, Zacks upgraded Methanex to a Hold in November 2012. A couple of other analysts recommended it as buy in this Zolmak news blog.
Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex. See my spreadsheet at mx.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Wednesday, December 19, 2012
Methanex Corp
On my other blog I am today writing about our Secular bear market... continue...
I do not own this stock of Methanex Corp (TSX-MX, NASDAQ:-MEOH). I started reviewing this stock in 2010 because I had read some good reports on it. It also got a solid "C" grade in a money sense review of stocks in November 2010. You might be interested in this link to Money Sense. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.
The problem for a Canadian investing in this company is that, not only does the company report in US$, but it also pays dividends in US$. That means that if you invest in this stock in a Canadian currency account your dividends will fluctuate with the US-CDN currency exchange rate. As with a lot of companies reporting in US$, this stock has done better in US$ terms than in CDN$ terms.
This company started to pay dividends in 2002 and that year they only paid dividends for half the year. Over the past 5 and 8 years dividends have grown at the rate of 4.6% and 11.5% per year in CDN$ terms. (In US$ terms they have grown at 6.5% and 14.8% per year.)
With the low dividend yield also comes low Dividend Payout Ratios. The 5 year median DPRs are 32% for earnings and 15% for Cash Flow. This low dividend yield together with the low increase rate will not provide much in the way of a great yield on your original purchase price. So if you bought this stock today, after 10 years, you would probably be only making 4.3% on your original purchase price. This might rise to 6% in 15 years. However, it would be a decent return.
This is an industrial stock, so it has been hit quite hard during recent recessions. Over the past 5 years the total return is down by 3.76% per year. There was a capital loss of 6.07% per year. Dividend income was at 2.31% per year. However, over the past 10 years this stock's total return is 14.05% per year with 10.21% per year from capital gain and 3.84% per year from dividends. You can do well over the longer term with this stock.
The outstanding shares have declined over the past 5 and 10 years by 2.5% and 3.4% per year, respectively. This is because they have bought back shares for cancellation in a number of years in the past. There have been some years of increases lately due to stock options.
Revenue growth is not good in CDN$ with growth at just 1.6% per year and 3.8% per year over the past 5 and 10 years. Growth is better in US$ at 4.4% per year and 8.5% per year over the past 5 and 10 years. Revenue per share is, of course, better because of the decreasing number of outstanding shares. In CDN$ terms, revenue per share has grown by 4.2% and 7.4% per year over the past 5 and 10 years.
Earnings are down over the past 5 years by some 16.4% per year. They are up over the past 10 years by 11% per year. Cash flow per share is down by 6.6% per year over the past 5 year and up by just 3.4% per year over the past 10 years. Book Value per share is up by 2.9% per year and 3% per year over the past 5 and 10 years. These values are in CDN$ terms.
Because earnings do fluctuate due to the business cycle, you might want to look at EPS with a 5 year running average. In this case, EPS is still down over the past 5 years, but by less than 1% per year. EPS are up over the past 10 year by 18% per year.
Return on Equity fluctuates because this is an industrial stock and it would get hit my recessions. The ROE for the financial year ending in 2011 was quite good at 16.2%. The ROE on comprehensive income was also good and around the same at 16.7%. This shows that the earnings are of good quality.
The Liquidity Ratio is good with the current ratio at 2.73 and the one for the financial year ending in 2011 at 1.72. The 5 year median is 2.29. The Debt Ratio is also very good, currently at 1.91 and with a 1.89 value at the end of the 2011 financial year.
The Leverage and Debt/Equity Ratios are fine with the current ratios at 2.37 and 1.24, respectively. The 5 year median ratios are 2.19 and 1.15, respectively.
What I like about the company is that they have good debt ratios. This is good for an industrial company because its business will fluctuate with the business cycle. We are always going to have recession and the good debt ratios will help at these times.
This is a stock you might buy for diversification purposes. You could do well over the longer term. The company obviously thinks that it will do well in the short term as they raised dividends 8.8% in 2012.
Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex. See my spreadsheet at mx.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 or StockTwits.
I do not own this stock of Methanex Corp (TSX-MX, NASDAQ:-MEOH). I started reviewing this stock in 2010 because I had read some good reports on it. It also got a solid "C" grade in a money sense review of stocks in November 2010. You might be interested in this link to Money Sense. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.
The problem for a Canadian investing in this company is that, not only does the company report in US$, but it also pays dividends in US$. That means that if you invest in this stock in a Canadian currency account your dividends will fluctuate with the US-CDN currency exchange rate. As with a lot of companies reporting in US$, this stock has done better in US$ terms than in CDN$ terms.
This company started to pay dividends in 2002 and that year they only paid dividends for half the year. Over the past 5 and 8 years dividends have grown at the rate of 4.6% and 11.5% per year in CDN$ terms. (In US$ terms they have grown at 6.5% and 14.8% per year.)
With the low dividend yield also comes low Dividend Payout Ratios. The 5 year median DPRs are 32% for earnings and 15% for Cash Flow. This low dividend yield together with the low increase rate will not provide much in the way of a great yield on your original purchase price. So if you bought this stock today, after 10 years, you would probably be only making 4.3% on your original purchase price. This might rise to 6% in 15 years. However, it would be a decent return.
This is an industrial stock, so it has been hit quite hard during recent recessions. Over the past 5 years the total return is down by 3.76% per year. There was a capital loss of 6.07% per year. Dividend income was at 2.31% per year. However, over the past 10 years this stock's total return is 14.05% per year with 10.21% per year from capital gain and 3.84% per year from dividends. You can do well over the longer term with this stock.
The outstanding shares have declined over the past 5 and 10 years by 2.5% and 3.4% per year, respectively. This is because they have bought back shares for cancellation in a number of years in the past. There have been some years of increases lately due to stock options.
Revenue growth is not good in CDN$ with growth at just 1.6% per year and 3.8% per year over the past 5 and 10 years. Growth is better in US$ at 4.4% per year and 8.5% per year over the past 5 and 10 years. Revenue per share is, of course, better because of the decreasing number of outstanding shares. In CDN$ terms, revenue per share has grown by 4.2% and 7.4% per year over the past 5 and 10 years.
Earnings are down over the past 5 years by some 16.4% per year. They are up over the past 10 years by 11% per year. Cash flow per share is down by 6.6% per year over the past 5 year and up by just 3.4% per year over the past 10 years. Book Value per share is up by 2.9% per year and 3% per year over the past 5 and 10 years. These values are in CDN$ terms.
Because earnings do fluctuate due to the business cycle, you might want to look at EPS with a 5 year running average. In this case, EPS is still down over the past 5 years, but by less than 1% per year. EPS are up over the past 10 year by 18% per year.
Return on Equity fluctuates because this is an industrial stock and it would get hit my recessions. The ROE for the financial year ending in 2011 was quite good at 16.2%. The ROE on comprehensive income was also good and around the same at 16.7%. This shows that the earnings are of good quality.
The Liquidity Ratio is good with the current ratio at 2.73 and the one for the financial year ending in 2011 at 1.72. The 5 year median is 2.29. The Debt Ratio is also very good, currently at 1.91 and with a 1.89 value at the end of the 2011 financial year.
The Leverage and Debt/Equity Ratios are fine with the current ratios at 2.37 and 1.24, respectively. The 5 year median ratios are 2.19 and 1.15, respectively.
What I like about the company is that they have good debt ratios. This is good for an industrial company because its business will fluctuate with the business cycle. We are always going to have recession and the good debt ratios will help at these times.
This is a stock you might buy for diversification purposes. You could do well over the longer term. The company obviously thinks that it will do well in the short term as they raised dividends 8.8% in 2012.
Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex. See my spreadsheet at mx.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 or StockTwits.
Subscribe to:
Posts (Atom)