Pulse Seismic Inc

I will be on holidays next week, so I will not be posting again until July 2nd, 2013.

On my other blog I am today writing about Dividend Paying Tech stocks...continue...

I do not own this stock Pulse Seismic Inc. (TSX-PSD, OTC- PLSDF). I got this stock through a Stock Filter. I asked for companies that were worth between $1 and $5.50 a share and had a yield between 4% and 20. I narrowed the list to 5. I was looking for filler stocks for my TFSA and this was one of 5 companies that I got and looked into. This is not a stock I chose, but I found it of interest so I am following it.

Dividends have been inconsistent on this stock. They had trouble in the 2008 bear market and cancelled dividends. They restarted dividends in 2011, but they are still below what was paid in 2008. Dividends are generally good when paid. Dividend Payout Ratios for cash flow tends to be quite low and is expected to be around 10% in 2013.

The 2012 financial year was good for this company, but they are not expected to make much in 2013 and some analysts feel that the earnings in 2013 will again be negative. If you look at last 12 months earnings ending in March 2013, the 1st Quarter of 2013, they are down by 34% from last year.

Total returns are good for the last 10 years but not so much for the last 5 years. The total return for the last 5 and 10 years is at 2.39% and 13.73% per year, with the dividend portion of this return at 2.24% and 5.04% per year, respectively and the capital gain portion at 0.15% and 8.71% per year, respectively.

The current Liquidity Ratio is good at 1.85. This ratio tends to vary a lot. The Debt Ratio is more consistent and the current Ratio is also good at 2.90. The current Leverage and Debt/Equity Ratios are also good at 1.53 and 0.53, respectively.

Looking at a number of measures to see how good the stock price is, all seem to point to a current high stock price. The 10 year P/B Ratio is 1.36 and the current one at 2.32 is 70% higher. The current Graham price is at $1.47 and the Price/Graham Price Ratio is at 2.52 when the 10 year high P/GP Ratio is much lower at 1.80. The Price/Cash Flow per Share Ratios and Price/Sales Ratios also point to a current high price.

When I look at insider trading, I find $1.9M of insider selling and $1.7M of net insider selling. There is a small amount of insider buying. Insiders have option like vehicles called Rights LTIP, Rights Performance Share Unit and Rights Restricted Share Unit. Insiders lately seem to be exercising the rights and getting shares recently.

When I look at analysts' recommendations, I find Strong Buy and Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings and how consensus recommendations are determined.) The 12 months stock price consensus is $3.33, which is some 10% below today's price.

In a video, Pulse Seismic President and CEO Neal Coleman talks about his company's ability to generate significant cash from its seismic data library.

The current price seems to be high, but a large part of that is due to the fact that estimates for earnings in 2013 are low. Earnings seem to fluctuate due to the amortization of seismic data library. However, the company still can make money off library items collected a very long time ago. On the other hand the stock price is the highest it has ever been.

A number of insiders own shares worth in the few $100,000 range. A director owns almost 15% of the company and his shares are worth around $33M. An investment company owns another 10% of the outstanding shares.

The current price seems a bit high, but there is no doubt this is an interesting company that can make money from selling their library data to over and over again. See my spreadsheet at psd.htm.

Pulse Data Inc. is a provider of 2D and 3D seismic library data and is based in Calgary, Alberta. Pulse owns the second-largest licensable seismic data library in western Canada. Pulse's 2D and 3D seismic data library extends over the Western Canada Sedimentary Basin, plus selected areas of the U.S. Rocky Mountains region and northern Canada, with a particular focus on active exploration areas. Its web site is here Pulse Seismic.

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.