Adding Dorel Industries as a Core Position

Screen Shot 2013-05-17 at 9.35.52 AMOne more company passing my basic screening is Dorel Industries (DII-B.TO).

Dorel is a Canada-based cyclical consumer products distributor, which focuses on juvenile products and bicycles.  It has distribution rights for some key brands like: Quinny, Maxi-Cosi, Safety 1st, Infanti and Bebe Confort juvenile products, and Cannondale, Schwinn, GT, Mongoose and Iron Horse bicycles.  They also distribute SUGOI sporting apparel.

Screen Shot 2013-05-31 at 11.07.19 AMI have analyzed the stock using my usual procedures. The results are as follows.

  • The P/E Ratio is 12.88, which is greater than the average historical P/E of 9.93 and the Graham Number is $54.90
  • The Dividend Yield is 2.97%, and the coverage is 260%
  • Forecast Growth Rate is 17.18%
  • The Gordon Return (Dividend + Growth) is 20.16%

The Margin of Safety at current prices is 11.79%.  The P/E is high (historically) but I think the growth rate is justification enough.  Also, the ex-dividend date is next week, which will pay me $0.3/share in cash.

  • Buy DII-B.TO @ $41.01

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