Investing in Power Corporation

POW ChartAnother stock passing my screen is Power Corp (POW.TO).

Power Corp is a diversified holding company with investments in Great West Life (insurance), IGM Financial (personal financial services such as mutual funds and financial advice), Pargesa (engineering and infrastructure), and some media properties.

I have owned Power Corp in the past, with good results.  Indeed, I only sold it when I made a strategic move away from stocks to ETFs.

Screen Shot 2013-05-31 at 10.15.08 AMI have analyzed the stock using the principles laid out in my Investment Policy, as follows.

  • The P/E Ratio is 12.54, which is less than the historical average of 15.21, and the Graham Number is $32.13
  • The Dividend Yield is 4.43%, and the coverage is 180%
  • Forecast Growth Rate is 13.25%
  • The Gordon Return (Dividend + Growth) is 17.68%
  • The Margin of Safety at current prices is 8.3%, which is a tiny bit low.

I would have liked to wait for a pullback to $25.80 to obtain a Margin of Safety of around 10% but I believe the stock has put in a bottom at around $25 and is moving higher.

  • Buy POW.TO @ $26.20

 

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3 thoughts on “Investing in Power Corporation

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