Topic: How To Invest

Dear Pat: You recently moved Arbor Memorial to a sell. Has the long-term trend for growth changed? If not, why should I sell? As well, its book value per share is high. Over the long term does this not give me some comfort that the stock cannot fall excessively? And looking at the book value, it dropped from 2007 to 2008. I do not understand this drop. I would appreciate your feedback. Thanks.

Article Excerpt

Arbor Memorial Services, $24.06, Toronto symbol ABO.A (Shares outstanding: 18.7 million; Market cap: $459.3 million;, owns 85 funeral homes, 41 cemeteries, 26 crematoria, and seven reception centres for memorial services. The company operates in eight provinces. Arbor was a recommendation of our Successful Investor newsletter for a number of years, until we advised selling the stock in our April 15, 2011, Successful Investor Hotline at $25. The stock reached a peak of around $33 a share in late 2007. By the time the stock market hit its lows in March 2009, Arbor had dropped nearly 55%, to $15. From then through April of this year, Arbor rose by about 70%, to more than $25. That’s partly because the company had a good year in fiscal 2010 (which ended October 31). Sales rose 15.2%, to $281.8 million from $244.7 million in fiscal 2009. Per-share earnings rose 15.6%, to $2.15 from $1.86 a year earlier. However, sales of cemetery plots and…

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