Monday, July 28, 2014

Inter Pipeline Ltd.

On my other blog I am talking about negative investment reports continue...

I do not own this stock of Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF). In 2008, a friend had asked me about this pipeline and I had no information on it, so I investigated it. It is a utility and I follow and have lots of utility stocks.

This is a dividend growth stock with a good dividend and moderate growth. The current dividend is 3.73% and the 5 year median dividend is 5.75%. The 5 and 10 year dividend growth is at 6.6% and 4.8% per year. The last dividend increase occurred in 2013 and was for 13%. Dividend increases have been good lately, but there were no increases in 2008 and 2009.

The 5 year median Dividend Payout Ratio for EPS is 98%. There is a problem in that in 2013 there was an earnings loss. The DPR for 2014 is expected to be 110% and then decrease from there. The 5 year median DPR for CFPS is 70%. The DPR for CFPS for 2013 was 75%. In 2014 the DPR for CFPS is expected to be 79% and then start to decrease.

Shareholders have been making money from this stock recently with the 5 and 10 year total return at 32.60% and 20.14% per year. The portion of this return attributable to dividends is at 6.38% and 5.92% per year over these periods. The portion of this return attributable to capital gains is at 26.21% and 14.22% per year over these periods.

Outstanding shares have increase by 6.6% and 9.01% per year over the past 5 and 10 years. The increases are due to DRIP, Stock Options and Share Issues. They also issued more shares in 2014 and this year so far they have increased the shares by another 4.4%. Because of the increasing shares, the values per shares become much more important.

Revenue, Earnings and Cash Flow growth is much better over the past 10 years than over the past 5 years. It is only Revenue per Share that shows negative growth over the past 5 years. Revenue is up by 22.6% and 2.2% per year over the past 5 and 10 years. Revenue per Share is down by 4.2% and up by 12.4% per year over the past 5 and 10 years. The company did suffer in the 2008 recession, but growth has been uneven since then.

Since there was an earnings loss in 2013, I will look at the 5 year running averages for EPS. Over the past 5 and 10 years EPS is up by 7.8% and 18.6% per year. EPS took a hit in 2008 also and until this year they have been growing. The earnings loss for 2013 was due to the company's reorganization and so is not serious.

Cash Flow has done the best and Cash Flow is up by 11% and 18.2% per year over the past 5 and 10 years. CFPS is up by 4.2% and 8.4% per year over the past 5 and 10 years.

The Return on Equity was below 10% 4 times in the past 10 years. In two of these years, 2007 and 2013 it was because earnings were negative. Prior to 10 years ago, ROE was very low. The 5 year median ROE was just 1.6%. The ROE on comprehensive income for 2013 was very low at just 1.3%.

The debt ratios are not very good. The Liquidity Ratio for 2013 is 0.15. It has to be at 1.00 before current assets can cover current liabilities. Part of this, but a very small part is the current portion of the long term debt. Another small part is outstanding current commercial papers. However, when you add that back in the Liquidity Ratio is 0.52. If you add in cash flow after dividends, it only rises to 0.72.

The Debt Ratio is a bit low at 1.45 and the Leverage and Debt/Equity Ratios are a bit high at 3.21 and 2.21 for 2013.

Sound bit for Twitter and StockTwits is: Dividend Growth Stock. The biggest current liabilities have to do with decommissioning obligations, environment liabilities and construction reclamation. Personally, I would want them to get their Liquidity Ratio under control before I would want to invest in this stock. See my spreadsheet at ipl.htm.

This is the first of two parts. The second part will be posted on Tuesday, July 29, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. The company is a limited partnership, not an income trust. Its web site is here Inter Pipeline.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Friday, July 25, 2014

Contrans Group Inc. 2

I do not own this stock of Contrans Group Inc. (TSX-CSS, OTC-CTFIF). I got this stock off an article in the Globe and Mail called "15 dividend stocks where payouts are expected to grow". This number cruncher article dated in February 2013 was looking for companies with earnings growth over the last 12 months and a decent Dividend Payout Ratio. (You may not be able to access this article beyond the pay wall.)

In the insider trading reporting there is a very small amount of insider selling and no insider buying. There are stock options but there was no increase in outstanding shares in 2013 due to stock options. The CEO owns almost all the Class B shares worth around $18.3M. He also has Class A shares worth around $50.9M. The CEO is also chairman of the Board. There is an officer that owns shares worth around $6M and a director with shares worth around $3.4M. So, there is good insider ownership.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.53, 13.84 and 16.05. The current P/E Ratio is 14.59 based on a stock price of $14.74 and 2014 EPS estimate of $1.01. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $11.62. The 10 year low, median and high median Price/Graham Price Ratios are 0.87, 1.06 and 1.27. The current P/GP Ratio is 1.27. This stock price test suggests that the stock price is relatively reasonable, but at the very high end of that range.

I get a 10 year median Price/Book Value per Share Ratio of 1.87. The current P/B Ratio is 2.48 a value some 32% higher. . This stock price test suggests that the stock price is relatively expensive.

The 5 year median dividend yield is 4.38% and the current dividend yield is 4.07% a value some 7% higher. Since dividend yield used to be a lot higher, using historical dividend yield in a stock price test makes no sense. However, a 4.07% dividend yield is a good one. The 5 year median dividend yield stock price test suggests that the stock price is relatively reasonable.

The analysts' recommendations are Buy and Hold. The consensus recommendation is a Hold. The 12 month consensus stock price is $15.50. This implies a total return of 9.23%, with 4.07% from dividends and 5.16% from capital gains.

A recent article in the Financial Post suggest for the trucking industry in Canada demand is beginning to overtake supply. The Dividend Blogger talks about this stock and its dividend increases. He thinks that if the 1 year return is less than the dividend increase then there might be a buying opportunity. An article in Trucking News talks about this company selling off its waste collection subsidiaries.

Sound bit for Twitter and StockTwits is: stock price is probably still reasonable. Stock rose some 32.8% last year and some 10.99% so far this year. Dividends increased 25% in 2013 and 20% in 2014. So over the past two years the capital gain is close to the dividend increases.

You expect that that the capital gains and the dividend increase would be roughly the same. So, analysts' expectations of 5.16% further rise would put the capital gain increase a bit higher than dividend increases. See my spreadsheet at css.htm.

This is the second of two parts. The first part was posted on Thursday, July 24, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Contrans Group Inc. is engaged in freight transportation. It provides freight transportation services to shippers located in Canada, as well as in the eastern, mid-western and southern United States. Its web site is here Contrans.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Thursday, July 24, 2014

Contrans Group Inc.

I do not own this stock of Contrans Group Inc. (TSX-CSS, OTC-CTFIF). I got this stock off an article in the Globe and Mail called "15 dividend stocks where payouts are expected to grow". This number cruncher article dated in February 2013 was looking for companies with earnings growth over the last 12 months and a decent Dividend Payout Ratio. (You may not be able to access this article beyond the pay wall.)

This Company used to be an income trust of Contrans Income Fund in 2008 and converted to a corporation in 2009. Dividends were cut some 74.4% between 2008 and 2010. Dividends were flat when it was an income trust, but since changing to a corporation, they have been increasing their dividends. The last dividend increase was for 20% in 2014.

Dividend payments are down over the past 5 and 10 years, but this does not reflect on the current dividend policy. The dividend has a very good yield at 4.07%. The median dividend increase over the past 4 years is at 18.75%.

As the article I read pointed out, the Dividend Payout Ratios are good. The DPR for EPS was at 55% for 2013 and has a 5 year median of 67%. However, this DPR for EPS has been trending lower over the past 5 years. The DPR for CFPS was 26% for 2013 and has a 5 year median of 31%.

The 5 and 10 year total return on this stock is at 20.75% and 6.73% per year. The portion of this return attributable to dividends was 4.69% and 6.24% per year. The portion of this return attributable to capital gains was 16.06% and 0.49% per year. In the future, dividends should be a lower portion of the total return, but there is reason to think that capital gains portion of the return will increase. That is because capital gains tend to match dividend increases for dividend growth stocks.

The company has two classes of shares, Class A shares with one vote each (these are sold on the TSX) and Class B with 10 votes each. Class B shares are owned by insiders. The total outstanding shares have increased by 2.7% and 3.6% per year over the past 5 and 10 years. Shares have increased due to Share Issues and have decreased due to Buy Backs.

Revenue, earnings and cash flow growth over the past 5 and 10 years has not been great, but the company was hit hard by the 2008 recession. Revenue, earnings and cash flow has been growing over the past 3 years up to 2013. Because outstanding shares have been growing, per share values are important.

Revenue has grown at 3.2% and 6.9% per year over the past 5 and 10 years. Revenue per Share has been flat over the past 5 years and has grown at 3.6% per year over the past 10 years. EPS is down by 3.2% per year over the past 5 years and up by 1.4% over the past 10 years. . Cash Flow per Share has been flat over the past 5 years and has grown at 3.5% per year over the past 10 years.

The Return on Equity has only been below 10% 1 year in the past 10 years and that was in 2010. The ROE for 2013 was 14.8% and the 5 year median is 14.8%. There is no difference between the net income and the comprehensive income for this company. This could point to the earnings being of good quality.

The Liquidity Ratio for 2013 is a little low at 1.04. If you add in cash flow after dividends the ratio becomes 1.67. The Debt Ratio is quite good at 2.05. The Leverage and Debt/Equity Ratios are also quite good at 1.95 and 0.95.

Sound bit for Twitter and StockTwits is: Dividend Growth Stock. The dividend yield and the dividend growth is currently quite good. See my spreadsheet at css.htm.

This is the first of two parts. The second part will be posted on Friday, July 25, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Contrans Group Inc. is engaged in freight transportation. It provides freight transportation services to shippers located in Canada, as well as in the eastern, mid-western and southern United States. Its web site is here Contrans.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Wednesday, July 23, 2014

Canam Group Inc.

On my other blog I am today giving answers, as best as I can, to other questions that should probably be asked of a dividend stock portfolio continue...

I do not own this stock of Canam Group Inc. (TSX-CAM, OTC- CNMGA). I started following this stock in September 2009 as I read a favorable review on it. I am interested in small cap companies that pay dividends, so this company fits into what I want to investigate.

I bought this at the end part of 2011 because I thought that the market had gone overboard in punishing the stock because of a dividend cut and the company was having a tough time. I thought I could make a few thousand dollars for my RRIF account and that is what I did. However, looking back at this it appears I sold far too soon.

This stock is not the normal dividend growth stock I generally like investing in. This stock has dividends, but they only pay them when they can afford to and this means that stopped dividends on occasion. They have paid dividends in 6 of the last 10 years. They have just resumed dividend payments in 2014 after stopping them mid-way through 2011.

I made a return of 105% when I held this stock for a short period. If I waited another year I would have made over 200%. Investors over the past 5 and 10 years have had a total return of 14.77% and 11.22% per year. The portion of this return attributable to capital gain is 13.85% and 9.85% per year. The portion of this return attributable to dividends is 0.92% and 1.37% per year.

Revenue, Earnings, and Cash Flow has just start to increase over the past 2 years. Analysts expect that this will continue over the next few years.

The company's debt ratios are good with the Liquidity Ratio at 2.03 and the 5 year median at 2.14 and the Debt Ratio at 1.98 and the 5 year ratio at 1.98. This suggests that the company has survivability. The Leverage and Debt/Equity Ratios are a little high at 2.03 and 1.03.

The analysts' recommendations on this stock are Strong Buy and Buy with the consensus recommendation a Buy. The 12 month stock price consensus is $17.80. This implies a total return of 31.67% with 1.17% from dividends and 30.50% from capital gains.

Sound bit for Twitter and StockTwits is: could make money on this stock. Recessions seem to hit this company hard. It was just recovering form 2000, when it got hit with 2008. Also, when they have problems, they cut dividends and then the stock price gets slammed. The stock price recovers well when they restart dividends. Is there money to be made in the ups and downs of this company? This could be fun. See my spreadsheet at cam.htm.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, India, Romania and Hong Kong. Its web site is here Canam.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Tuesday, July 22, 2014

Ballard Power Systems Inc.

I do not own this stock of Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP), but I used to. Back in 1997, I read about Ballard and fell in love with the idea of cars running with fuel cells. I could help save the environment and also make some money. It was very attractive. I sold this stock in 2006 because it had lost its attraction. It did not seem that Ballard fuel cells would be in any car anytime soon.

I lost on this stock by 5.32% per year or almost 38% of the money I invested. I was ahead in 2000, but the stock started to fall in October 2000 and never recovered. The stock has been rising since early 2013 and has continued to rise in 2014. However, it is still some 75% lower than when I bought it in 1997.

Have investors made money lately? Over the past 5 years investors have made 17.57% per year. This was all capital gain, of course. This capital gain could also disappear again as quickly as it came. Over the 10 years investors have lost 5.7% per year. Again, this is all capital loss.

The good news is that this company does have revenue. The bad news is that it does not make any profit or cash flow from this revenue. Revenue peaked in 2003 and has fluctuated, but basically has been declining since. However, analysts expect revenues to pick up again over the next few year.

As far as earnings go, the company had one year of profit in the past 10 years and that was in 2005. The company has had no positive cash flow in any year in the past 10 years.

Another good thing is the debt ratios. The Liquidity Ratio is 2.30, the Debt Ratio is 2.30 and the Leverage and Debt/Equity Ratios are 1.71 and 0.71. These are all great ratios.

There are not many analysts following this stock. When I look at analysts' recommendations I find Strong Buy and Hold recommendations. The consensus recommendation would therefore be a Buy. The 12 month consensus stock price is $3.88 US$. This is some 6.3% lower than today's US$ price of $4.14.

There is an investors news alert on Ballard on Market News Call after the stock jumped up 5% today. There is also a news article in the Wall Street PR about Ballard Power profiting from Toyota producing a fuel cell car. However, I heard all this before in 1997 when I first invested in this company. The fuel cell car went nowhere then. Is it different this time?

Sound bit for Twitter and StockTwits is: invest on hope, not financials. That is people are still probably investing in this company as I did, on hope, not because of the financials. I thought it was good that the company had revenue at the time I bought it. However, at some point a company must make earnings and cash flow. On the other hand, this company has survived a long time without much of either. See my spreadsheet at bld.htm.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Ballard Power Systems, Inc. is a global leader in PEM (proton exchange membrane) fuel cell technology. They provide clean energy fuel cell products enabling optimized power systems for a range of applications. Ballard offers smarter solutions for a clean energy future. Its web site is here Ballard.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Monday, July 21, 2014

Artis REIT 2

On my other blog I am today giving answers, as best as I can to recent questions asked about having a dividend stock portfolio continue...

I do not own this stock of Artis REIT (TSX-AX.UN, OTC-ARESF). Early in 2013, this company was mentioned as a good REIT to own. A number of people I correspond with mentioned this REIT. However, my first view of it is not positive. Distributions have only increased by 0.57% over the past 5 years. This is extremely low and way below inflation.

In the insider trading report there is a minimal about insider buying and insider selling with a small net insider selling. The outstanding shares were increase by around 221,000 shares with a book value of $3.5M and this amount of shares were worth around $3.3M at the end of 2013. This number of shares is way less than one half of one per cent of outstanding shares.

There is insider ownership with the CEO owning shares worth around $8.0M and an officer with shares worth around $5.4M. There are not only stock options but there are other stock options like vehicles called Restricted Units. So, there is a moderate amount of insider ownership and stock options.

You cannot do any stock price testing using Price/Earnings per share Ratio as the 5 year low, median and high medina P/E Ratios are 3.18, 3.59 and 4.01. These are so low they are unrealistic to use in a stock price test. The 10 year ratios are even worse because they are negative. The current P/E Ratio is 20.55 based on a stock price of $15.82 and 2014 EPS of $0.77. On an absolute basis, a P/E of 20.55 does seem a bit on the high side for a REIT.

I get a Graham Price of $17.20. The 10 year low, median and high median Price/Graham Price Ratios are 0.71, 1.29 and 1.77. The current P/GP Ratio of 0.92 says that the stock price is relatively reasonable.

The 10 year Price/Book Value per Share Ratio is 1.01. The current P/B Ratio is 0.93 a value some 8% lower. This stock price test suggests that the stock price is relatively reasonable.

The 5 year median dividend yield is 8.35% a value some 18% higher than the current dividend yield of 6.83%. This stock price test suggests that the stock price is rather high. The historical average dividend yield is even higher at 12.77%. However, the historical median dividend yield is 7.13% and using these figures in the test gives a stock price that is relatively reasonable.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. The consensus recommendation is a Buy. The 12 month stock price consensus is $17.10. This implies a total return of 14.925 with 8.09% from capital gains and 6.83% from distributions.

An article by Biz Journals talks about a recent office purchase by Artis REIT. A Motley Fool article talks about now may be a good time to be in REITs like Artis. The blogger called the Dividend Blogger talked about 6 REITs to consider in August 2013.

Sound bit for Twitter and StockTwits is: Price is reasonable for a REIT. See my spreadsheet at ax.htm.

This is the second of two parts. The first part was posted on Friday, July 18, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Artis REIT's portfolio is comprised of industrial, retail, and office space in Canada and the United States. Its web site is here Artis REIT.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Friday, July 18, 2014

Artis REIT

I do not own this stock of Artis REIT (TSX-AX.UN, OTC-ARESF). Early in 2013, this company was mentioned as a good REIT to own. A number of people I correspond with mentioned this REIT. However, my first view of it is not positive. Distributions have only increased by 0.57% over the past 5 years. This is extremely low and way below inflation.

This REIT has not been around very long having only been listed on the TSX since 2004. It was listed as Westfield REIT. It was rebranded as Artis REIT in 2007. In a lot of cases I do not have a full 10 years of data.

Dividends were increased a bit at first at just over 1% in 2008 and 2009. However, they have been flat ever since. The problem is that they had quite a few years of earnings losses and only started to have positive earnings in 2011. The Dividend Payout Ratio for 2013 was 95% for EPS and 72% for CFPS. They are expected to be even higher in 2014 at 140% and 186% respectively.

Analysts do not expect them to raise their dividends anytime soon. I do not invest in companies that do not raise their dividends and so I would not invest in this company. For REIT I expect dividends to go up around the rate of inflation as dividend yield are generally quite high. A lot of REITs do not rise dividends every year, but they do increase them. For this REIT the dividend yield is currently at 6.83%.

Of course because they are a REIT, analysts look at Dividend Payout Ratios for Adjusted Funds from Operations (AFFO) and Funds from Operations (FFO). The DPR for AFFO for 2013 was at 86% and for FFO was at 74%.

Investors have been earning money from this stock. The 5 and 10 year total return to date is 15.25% and 21.80% per year. The portion of this total return attributable to distributions is at 8.44% and 11.89% per year. The portion of this total return attributable to capital gains is at 6.81% and 9.91% per year. A problem is that the stock price has currently stalled and earnings are expected to drop this year by over 30%.

Outstanding shares have increased by 31% and 70% per year over the past 5 and 9 years. Revenues have grown nicely, but Revenue per Share has not. Cash Flow has grown, but CFPS has not. You cannot measure growth in earnings when earnings are negative (or you have earning losses).

Revenues have grown at 27% and 111% per year over the past 5 and 10 years. Revenue per Share has decreased by 4% and increased by 24% per year over the past 5 and 10 years. If you look at 5 year running averages for RPS, you get growth over the past 5 years at 5% per year.

AFFO has grown at 7.6% per year over the past 3 years. The AFFO has only been used for a few years. The FFO has declined by 2.4% and increased by 12% per year over the past 5 and 8 years. If you look at 5 year running averages over the past 4 years, the increase in FFO is up 1% per year.

Cash Flow has grown at 37% per year over the past 5 and 9 years. CFPS has grown at 4.2% and 32% per year over the past 5 and 9 years. If you look at 5 year running averages over the past 5 years, CFPS has grown at 10% per year.

There has not been much in the way of Return on Equity because of earnings losses. The ROE for 2013 was just 7.7%. The ROE on comprehensive income was a bit better at 8.8%. So what earnings they have seem to be solid.

Another place where this company falls short is with debt ratios, specifically, the Liquidity Ratio which for 2013 was at 0.21. When this ratio is less than 1.00, it means that the current assets cannot cover the current liabilities. If you take off the current portion of the longer term debt the Liquidity Ratio is 0.82. If you add in the cash flow after distributions, the ratio is 1.42. The Debt Ratio is good at 1.97. The Leverage and Debt/Equity Ratios are fine at 2.03 and 1.03.

Sound bit for Twitter and StockTwits is: REIT, but not dividend growth stock. See my spreadsheet at ax.htm.

This is the first of two parts. The second part will be posted on Monday, July 21, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Artis REIT's portfolio is comprised of industrial, retail, and office space in Canada and the United States. Its web site is here Artis REIT.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Thursday, July 17, 2014

Atlantic Power Corp.

I do not own this stock of Atlantic Power Corp. (TSX-ATP, NYSE-AT). Because I like utility companies and in 2010, I have read two columns that recommended this particular utility company (TSX-ATP), I decided to investigate it. This company is in the TSX Utility Index and this is perhaps this is why it is recommended?

This stock was an issued on the TSX as an income trust in 2004. However in 2009, it changed its structure to a corporation. Dividends were increased until 2012. In 2013, dividends were decreased by 65% after the company had 4 years of losses. The financial year of 2013 also resulted in a loss. A number of analysts believe that the dividends will be cut again in 2014.

For Dividend Payout Ratios, we can only look at them from a cash flow per share perspective because this company is has negative EPS. The 5 year median PDR for CFPS is 90%. The DPR for CFPS for 2013 was 63%.

I know that some analysts are still looking at DPR in regards to Distributable Cash and Adjusted Funds from Operations (AFFO). For Distributable Cash the 2013 DPR is 53%. For AFFO, the DPR is 60.7%. Some analysts are quoting AFFO for 2014 and they expect it to be around a negative $0.05. I do not like using these measurements as this company is no longer an income trust. Even at that, there would seem to be no analyst that thinks this company can cover distributions in 2014.

Outstanding shares have increased by 14.5% and 14.1% per year over the past 5 and 10 years. Shares have increased due to Share Issues, Stock Options and DRIP. Growth is good in Revenue, but not in Revenue per Share over the past 5 years. Growth is good for cash flow over the past 10 years, but not over the past 5 years. This is the same pattern for growth cash flow per share. There is no growth in earnings as earnings have been negative for the last 5 years.

The Revenue has grown at 11% and 46% per year over the past 5 and 10 years. Revenue per Share has declined at 3.5% and grown at 28% per year over the past 5 and 10 years. Cash Flow has grown at 2% and 40% per year over the past 5 and 10 years. CFPS has declined by 11% and grown by 22% per year over the past 5 and 10 years. These figures are in US$ as the company reports in US$.

The debt ratios are fine. The Liquidity Ratio for 2013 is 0.96. If you include cash flow after dividends, this ratio is 1.18. There is the current portion of the long term debt included in the Liquidity Ratio and if this is subtracted for 2013, the ratio is 2.16. The Debt Ratio for 2013 is 1.48. The Leverage and Debt/Equity Ratios for 2013 are 2.91 and 1.97, respectively.

As far as testing the current stock price, I cannot use the Price/Earnings per Share Ratios as the company has no profits. This is the same reason I cannot use the Graham Price. If you look at Price/Book Value per Share, the 10 year median value is 2.15 and the current P/B Ratio is some 61% lower at 0.85. This stock test says that the stock price is relatively cheap. On an absolute basis, a P/B Ratio of 0.85 is very low and shows a cheap price.

The Price/Cash Flow per Share 10 year median ratio is 9.61. The current P/CF Ratio is 5.31 a value some 45% lower. This stock test says that the stock price is relatively cheap. On an absolute basis, a P/CF Ratio of 5.31 is low and shows a cheap price.

The 10 year median Price/Revenue per Share or P/S Ratio is 2.68 and the current P/S Ratio is 0.87 a value 68% lower. This stock test says that the stock price is relatively cheap. On an absolute basis, a P/S Ratio of 0.85 is very low and shows a cheap price.

When I look at the analysts' recommendations, I find Buy, Hold, Underperform and Sell recommendations. The consensus recommendation is Underperform. The 12 month stock price consensus is $3.53. This implies a total loss of 6.21%. The capital loss would be 15.75% and the dividends are at 9.55%. However, I do not think you can count on getting the dividends, so loss could be larger.

The Investing Daily site has put out an article on this company called "Atlantic Power Dividend in Jeopardy Again". It is dated November 2013, but I do not think things have changed much. The site Mideast Time talks about analysts' ratings on Atlantic Power. The loss for the first quarter at $0.16 and lower than the analysts' consensus loss of $0.25.

Sound bit for Twitter and StockTwits is: company is struggling but possibly cheap. See my spreadsheet at atp.htm.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Atlantic Power Corporation is an independent power producer that owns interests in a diversified fleet of power generation and transmission projects located in the United States. This company has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. ATP owns interests in a diversified portfolio of independent, non-utility power generation projects and one transmission line situated in major U.S. markets. Its web site is here Atlantic Power.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Wednesday, July 16, 2014

Computer Modelling Group Ltd. 2

On my other blog I am today writing about making big returns continue...

I own this stock of Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF). I first bought this stock in July 2008. I was looking for something to buy. This company is a dividend paying growth stock that would also be considered to be a small cap with a capitalization of around $115 million. Insiders are currently buying this stock. It has great growth and it is in information technology, a favourite sector of mine.

When I look at insider trading, I find some $5.7M of insider selling and some $5.6M of net insider selling. There is a small amount of insider buying. Net insider selling is one half of one percent of the market cap. That is a low amount.

Last year the outstanding shares where increased for stock options by 1.08M shares (or around 1.38%) with a book value of $14.4M. This number of shares was worth $15.7M at the end of March 2014. The prior year had the outstanding shares increased for stock options by 0.9M shares (or 1.2%) with a book value of $10M and this number of shares was worth $9.6M at the end of March 2013.

For insiders, the stock options are very good and much higher than most companies give out. Generally, outstanding shares are only increased less than one half of one percent for stock options. On the other hand shareholders have also made a lot of money on this stock.

There is insider ownership with the CEO having shares worth around $56.3M (and up from last year when he owned $11.9M). Also the CFO owns shares worth $1.3M, a director owns shares worth around $2.9M and the Chairman owns shares worth around $6.5M.

The 5 year low, median and high median Price/Earnings Ratios are 21.31, 22.78 and 27.91. These are a lot higher than the corresponding 10 year values of 12.60, 17.09 and 21.11. The current P/E Ratio is 35.71 based on a stock price of $14.64 and 2014 EPS of $0.41. By this stock price test, the current stock price is relatively expensive. (Although this is a tech and valuations for such stocks can get very high.)

I get a Graham Price of $2.73. The 10 year Price/Graham Price Ratios are 1.78, 2.33 and 2.89. The current P/GP Ratio is 5.37 based on a stock price of $14.64. By this stock price test, the current stock price is relatively expensive. (It is also quite expensive on an absolute basis.)

The 10 year Price/Book Value per Share Ratio is 7.20. The current P/B Ratio is 18.17 a value some 152% higher. I get a current BVPS of $0.81. A P/B Ratio of 18.17 is very high on an absolute basis. By this stock price test, the current stock price is relatively expensive.

I get a current dividend yield of 2.73%. The 5 year median dividend yield is 3.63% a value some 24% higher. The historical average dividend yield and historical median dividend yields are 4.93% and 3.52%, values some 45% and 24% higher than the current dividend yield. By this stock price tests, the current stock price is relatively expensive.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $16.00. This implies a total return of 12.02% with 2.73% from dividends and 9.29% from capital gains. This is not much a return from capital gains for a buy on a stock that already has high valuations. (A few analysts are concerned about the company's current high valuations.)

There is a good review of this stock on a blog calledInternational Growth Stocks. The Times Colonist talks about the company increasing its dividends and doing a 2 for 1 stock split.

Sound bit for Twitter and StockTwits is: Company is overbought. I still think that this is a great company and that I will earn good money from it still, but the current valuations are too high. See my spreadsheet at hse.htm.

This is the second of two parts. The first part was posted on Tuesday, July 15, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Computer Modelling Group Ltd. is a computer software technology and consulting company serving the oil and gas industry. CMG is the leading supplier of advanced processes reservoir modelling software in the world with a blue chip client base of international oil companies and technology centers in approximately 50 countries. Its web site is here Computer Modelling Group.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Tuesday, July 15, 2014

Computer Modelling Group Ltd.

I own this stock of Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF). I first bought this stock in July 2008. I was looking for something to buy. This company is a dividend paying growth stock that would also be considered to be a small cap with a capitalization of around $115 million. Insiders are currently buying this stock. It has great growth and it is in information technology, a favourite sector of mine.

Not only has this stock given out special dividends each year, usually around $0.03 per share, they have also increased their dividends over the past 5 and 9 years at the rate of 23% and 38% per year. They are also paying out over 100% of the earnings and 100% of the cash flow between the regular and special dividends.

The thing is they are selling software. Once the software is built they can sell it over and over again to different companies. They are basically given out in dividends all that they can.

Since I initially bought this stock I have made a return of 38.92% per year with 33.13% per year from capital gains and 5.79% per year from dividends. The total return over the past 5 and 10 years is at 36.44% per year and 46.52% per year. The portion of these returns attributable to dividends is at 5.20% and 8.17% per year and the portion of these returns attributable to capital gains is at 31.24% and 38.35% per year.

The outstanding shares have increased by 2.6% and 2.3% per year over the past 5 and 10 years. Shares have increased due to Stock Options and they have decreased due to Buy Backs. Growth in revenue, earnings and cash flow has been good, especially over the past 10 years.

Revenue per Share is up by 8.34% and 16.96% per year over the past 5 and 10 years. EPS are up by 8.1% and 23.8% per year over the past 5 and 10 years. Cash Flow per Share has increased by 5.75% and 19.9% per year over the past 5 and 10 years.

The 5 year grown is low because exactly 5 years ago was a year of very good growth for the company. If you look at 5 year running averages, the 5 year growth is much better. For example, using 5 year running averages the Cash Flow per Share is at 19.4% and 25.8% per year over the past 5 and 10 years.

Ever since the company started to earn profits in 2001, the Return on Equity has been over 10% each year. The ROE for the financial year ending on March 31, 2014 is 43.7%. The 5 year median is 48%. The comprehensive income is the same as the net income.

All the debt ratios are very good. The Liquidity Ratio is 2.73. The Debt Ratios is 2.70. The Leverage and Debt/Equity Ratios are 1.59 and 0.59.

I have done very well in this stock. It has just recently done another 2 for 1 stock split. This is a tech stock, so I sold half my shares in 2011 to lock in my profit. Sound bit for Twitter and StockTwits is: Company is a dividend growth tech stock. See my spreadsheet at hse.htm.

This is the first of two parts. The second part will be posted on Wednesday, July 16, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Computer Modelling Group Ltd. is a computer software technology and consulting company serving the oil and gas industry. CMG is the leading supplier of advanced processes reservoir modelling software in the world with a blue chip client base of international oil companies and technology centers in approximately 50 countries. Its web site is here Computer Modelling Group.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.