Adding Cogeco Cable

Screen Shot 2013-12-30 at 9.33.27 PMCogeco Cable (CCA.TO) meets my screening criteria.

Cogeco is a Canadian cable company providing cable TV, internet and voice over IP (VOIP) services to domestic and small business customers in Ontario and Quebec.  They also provide enterprise services – data centre, managed information technology (IT) and connectivity services – for medium and large enterprises and public sector customers.

Cogeco acquired Atlantic Broadband in 2012 and Peer 1 Network Enterprises in 2013.

I analyzed the stock using my usual procedures. The results are as follows.Screen Shot 2013-12-30 at 10.47.51 PM

  • The P/E Ratio is 11.83, which is a little lower than the average historical P/E of 12.38, and the Graham Number is $49.93
  • The Dividend Yield is only 2.52%, which is low, but the coverage is 335% which supports a future dividend raise
  • Forecast Growth Rate is good at 11.60%, compared with 14.45% historically
  • The Gordon Return (Dividend + Growth) is 14.12%, which is high
  • The Margin of Safety at current prices is -8%. This is low but I think the price is fair given the growth prospects.

I believe that the stock is fairly priced here.

  • Buy LB.TO @ $48.25

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