price to sales ratio
PRECISION DRILLING CORP. $6.31 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 292.8 million; Market cap: $1.8 billion; Price-to-sales ratio: 0.8; Dividend yield: 4.4%; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract drilling services to land-based oil and gas producers, mainly in North America. It operates 335 rigs.
In the quarter ended September 30, 2014, Precision’s revenue rose 19.7%, to $584.6 million from $488.5 million a year earlier. That’s mainly because producers in Western Canada and the U.S. require more rigs that can reach deeper pockets of oil and gas.
Earnings jumped 79.4% in the quarter, to $52.8 million, or $0.18 a share. A year earlier, Precision earned $29.4 million, or $0.10 a share.
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In the quarter ended September 30, 2014, Precision’s revenue rose 19.7%, to $584.6 million from $488.5 million a year earlier. That’s mainly because producers in Western Canada and the U.S. require more rigs that can reach deeper pockets of oil and gas.
Earnings jumped 79.4% in the quarter, to $52.8 million, or $0.18 a share. A year earlier, Precision earned $29.4 million, or $0.10 a share.
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SHAWCOR LTD. $41 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.6; Dividend yield: 1.5%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and natural gas pipelines from rusting. It also makes industrial products, like electrical wire and protective sheaths.
The company recently sold its 50% stake in a joint venture that operates a pipe-coating facility in Brazil for $29.7 million U.S. It also wrote down the value of its other Brazilian deepwater pipe-coating subsidiary by $28.5 million (Canadian).
As a result, ShawCor’s earnings dropped 92.3% in the third quarter of 2014, to $5.6 million, or $0.09 a share. Without the writedown and other unusual items, it earned $0.51 a share in the latest quarter. A year earlier, the company earned $73.0 million, or $1.21 a share. Revenue fell 10.7%, to $469.6 million from $525.8 million.
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The company recently sold its 50% stake in a joint venture that operates a pipe-coating facility in Brazil for $29.7 million U.S. It also wrote down the value of its other Brazilian deepwater pipe-coating subsidiary by $28.5 million (Canadian).
As a result, ShawCor’s earnings dropped 92.3% in the third quarter of 2014, to $5.6 million, or $0.09 a share. Without the writedown and other unusual items, it earned $0.51 a share in the latest quarter. A year earlier, the company earned $73.0 million, or $1.21 a share. Revenue fell 10.7%, to $469.6 million from $525.8 million.
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FINNING INTERNATIONAL INC. $24 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.4 million; Market cap: $4.1 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.finning.com) is the world’s largest dealer of tractors, bulldozers and trucks made by Caterpillar Inc. (New York symbol CAT). It also sells heavy equipment made by other firms. Finning’s clients are mainly in the mining, forest products and construction industries.
Weaker commodity prices have hurt demand for new gear in Canada and South America. That cut Finning’s earnings by 34.0% in the quarter ended September 30, 2014, to $0.33 a share from $0.50 a year ago. Without one-time items, including charges related to new tax laws in Chile and Argentina, Finning earned $0.50 a share in the latest quarter.
Overall revenue fell 6.2%, to $1.7 billion from $1.8 billion a year earlier.
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Weaker commodity prices have hurt demand for new gear in Canada and South America. That cut Finning’s earnings by 34.0% in the quarter ended September 30, 2014, to $0.33 a share from $0.50 a year ago. Without one-time items, including charges related to new tax laws in Chile and Argentina, Finning earned $0.50 a share in the latest quarter.
Overall revenue fell 6.2%, to $1.7 billion from $1.8 billion a year earlier.
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SNC-LAVALIN GROUP INC. $40 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.5 million; Market cap: $6.1 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.4%; TSINetwork Rating: Average; www.snclavalin.com) is narrowing its focus to engineering projects in the oil and gas, mining and water treatment industries.
As part of this plan, it recently paid $2.1 billion for U.K.-based Kentz Corp., which supplies engineering and construction services to oil and gas firms. Kentz increased SNC’s exposure to fastgrowing regions like the Middle East, Asia and Australia.
To pay for Kentz, SNC recently sold AltaLink, which distributes electricity in Alberta, for $3.1 billion.
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As part of this plan, it recently paid $2.1 billion for U.K.-based Kentz Corp., which supplies engineering and construction services to oil and gas firms. Kentz increased SNC’s exposure to fastgrowing regions like the Middle East, Asia and Australia.
To pay for Kentz, SNC recently sold AltaLink, which distributes electricity in Alberta, for $3.1 billion.
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LINAMAR CORP. $66 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.8 million; Market cap: $4.3 billion; Price-to-sales ratio: 1.0; Dividend yield: 0.6%; TSINetwork Rating: Average; www.linamar.com) started up in 1966 with just a single machine shop in Guelph, Ontario.
The company now has 45 plants in North and South America, Europe and Asia that make a variety of automotive parts, including cylinder heads, cylinder blocks, camshafts, crankshafts and connecting rods.
The company gets around 80% of its revenue and 70% of its earnings by making engines, transmissions and other precision-machined parts for automakers. In 2013, General Motors, Ford, Chrysler and Caterpillar accounted for 59.4% of its revenue.
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The company now has 45 plants in North and South America, Europe and Asia that make a variety of automotive parts, including cylinder heads, cylinder blocks, camshafts, crankshafts and connecting rods.
The company gets around 80% of its revenue and 70% of its earnings by making engines, transmissions and other precision-machined parts for automakers. In 2013, General Motors, Ford, Chrysler and Caterpillar accounted for 59.4% of its revenue.
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In August 2014, Gannett announced it would split into two companies. One will focus on newspapers and their associated websites, and the other will hold its TV stations and stand-alone websites. The stock is down 14% since the spinoff announcement, mainly because investors are worried about falling advertising revenue. Still, studies have shown that after the first few months, spinoffs tend to outperform groups of comparable stocks for several years. That’s mainly because companies will only take on the costs of a spinoff when they have reason to believe it will boost the value of both the new and remaining businesses....
PETSMART INC. $81 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 99.4 million; Market cap: $8.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.petm.com) has accepted an $83.00-a-share takeover offer from a group of private firms. The purchase price works out to a 159.4% gain since we first recommended PetSmart at $32 in our October 2007 issue. The buyers aim to complete the takeover in the first half of 2015. Investors should hold their shares and tender them to avoid paying brokerage fees....
These three companies use oil to maker their products, so they all stand to gain from the 40% drop in crude prices since June 2014. And even when oil rebounds, they will continue to benefit from recent acquisitions and their high market shares. However, not all are buys right now. SHERWIN-WILLIAMS CO. $246 (New York symbol SHW; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 96.0 million; Market cap: $23.6 billion; Price-to-sales ratio: 2.2; Dividend yield: 0.9%; TSINetwork Rating: Above Average; www.sherwin-williams.com) is North America’s largest paint and varnish producer....
VERIZON COMMUNICATIONS INC. $46 (New York symbol VZ, Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 4.2 billion; Market cap: $193.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.8%; TSINetwork Rating: Average; www.verizon.com) says strong price competition will likely slow its wireless division’s growth, particularly sales of cheaper mobile phones and service plans. Wireless accounts for 70% of Verizon’s revenue. However, the company is doing a good job of getting customers to upgrade from basic cellphones to more profitable smartphones. In addition, demand for its FiOS high-speed fibre optic Internet and TV services continues to improve. Verizon is a buy....
PROCTER & GAMBLE CO. $89 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $240.3 billion; Price-to-sales ratio: 3.1; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.pg.com) aims to sell its Germany-based Wella hair care operation, which makes shampoos, dyes and styling products. The company would probably receive $7 billion for Wella, roughly what it paid for it in 2003. This sale is part of Procter’s plan to sell about 100 less-profitable brands. That will leave it with around 80 that together account for 90% of its sales and 95% of its profits. This tighter focus will also cut Procter’s manufacturing and distribution costs....