Savaria Corporation an accumulate

Jun 22nd, 2016 – 1 Comment

Dividend yield is 2.5%


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


Read the author's full profile.


Further Research

Read more about In home lifts.


SIS LOGO

Could you examine Savaria for me?

Thanks,

Peter

 

Hey Peter,

Thanks for the assignment. This will be my first inspection of the case for Savaria Corporation (SIS TSX). The company operates in a specialized niche serving the needs of those with mobility issues. They design, engineer, and manufacture accessibility lifts, elevators, and  wheelchair van conversions. The company has enjoyed a five year annual revenue growth rate of 8.5% as they have benefited from a number of macro-trends. The drivers include an aging population, the desire to age at home, and high obesity rates.

The company earns 84% of its revenue from its lift and elevator segment with the remaining 16% attributed to their vehicle unit. Geographically 54% of revenue comes from the United States, 37% from Canada, and 9% internationally. The market capitalization is $281.88 million which would place it in the small cap section of your portfolio. The dividend yield is 2.5% so the asset produces tax favourable income.

A scan of the charts will inform my thoughts on this investment.

SIS

The three-year chart depicts a stock that has been on a run that started in 2013 when it traded below $2.00. There are a lot of good patterns that are worth mentioning. The first is that the advance has enjoyed support along the 50 and 200-day moving averages. The stock built a base near $5.00 in from August to December of 2015 before taking off in February of 2016. SIS touched a 52-week high of $9.00 in late May and has been pulling back

 

 

 

 

 

 

 

 

SIS2

The six-month chart highlights the move up and through the 50 and 200-day moving averages in February as the MACD and the RSI generated buy signals. The golden cross that formed in March when SIS was trading near $6.25 informed investors that there was more gas in the tank. The shares were overbought for most of April and May before the retreat from the 52-week high.

At the moment the stock is retesting support along the 50-day moving average with no indications that we can expect a new leg up in the near term. I would say that this pony has run hard and is now taking a breather. I would suggest accumulating SIS, collecting the dividend, and letting the demographics work for you.

Next time I will undertake an assignment from Laura to find a way to take advantage of the coming legalization of weed.

Make it a profitable day and happy capitalism!

 

 

Categories: In home lifts
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media