Wow- time flies when you’re having fun! Seems like I just wrote up the last round of quarterly updates, but it’s already that time again. Two of my holdings have filed quarterlies this week, so I thought I’d provide an update.
First up, Jewett Cameron (JCTCF). JCTCF was one of my five largest holdings heading into today and still represents one of my largest positions, but I did sell a bit into today’s big run up (as I mentioned on my twitter account). Anyway, JCTCF reported blow out earnings today. Sales were up over 20% YoY, and operating income was up over 50%. The company’s still incredibly cheap, w/ an EV / EBIT under 4.5x (using today’s closing price of ~$11.70), and they did announce some good things. The company is considering buying back even more shares, and they’re also considering dropping their Canadian listing, which would allow them to save on unnecessary listing costs. The company also bought a bit of land after quarter end.
However, I’m worried about some of the new language in their 10-Q. Specifically, they mention potentially acquiring another business with their stock or raising new funds by selling stock (see page 26). Given their strong cash flows and high insider ownership, I don’t think it’s likely…. but it’s strange that they would add that language if they weren’t considering it.
New orders for the second quarter and year-to-date 2012 totaled $6,934,000 and $11,109,000, respectively, compared to $3,662,000 and $7,852,000 for the comparable periods of 2011. The fluctuation resulted from an increase in new orders for solid state relays and a custom optoelectronic product to the military. Management anticipates a continued upside in new orders for the remainder of 2012.Backlog totaled $9,606,000 on May 26, 2012 compared to $8,024,000 as of May 28, 2011 and $6,231,000 on November 30, 2011. The majority of the backlog is expected to be shipped in the next twelve (12) months and represents a good mix of the company’s products and technologies with14% in the commercial market, 71% in the military market, and 15% in the space market compared to 26% in the commercial market, 48% in the military market, and 26% in the space market at May 28, 2011. The majority of the increase in the backlog is in solid state relays and a custom optoelectronic product ordered by the military.The Company’s management expects sales and operating income to increase in the second half of 2012 as compared to the first half of 2012, based on the current backlog and anticipated new orders in the second half of 2012.
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