Barry Schwartz
Arbor Memorial Services Inc.
ABO.B-T
TOP PICK
Sep 29, 2009
Funeral homes. Deep value stock. Recently raised its dividend 600%. Low debt to equity ratio. Generates significant free cash flow. Management has a big stake in the company. Trading at less than 10X earnings.
(Top Pick Sep 29/09, Up 10%) Death is a pretty good business, unfortunately. Good margins, raised dividend 600% in 2009. Good balance sheet. Feels it could higher. It trades by appointment (do limit order), doesn’t trade every day.
(Top Pick Sep 29/09, Up 19%) Will have a really good quarter because of purchases before HST in Ontario. They are in good shape. Demographics in Canada bode very well for them. Good long-term play. Keep raising the dividend.
Grown it’s earnings about 40% over the last 4 years and stock has gone nowhere. Deep discount to NAV. Buying more funeral homes and expanding their cemeteries. Expect to see earnings $3 by 2013, which puts it in the $40 range.
(A Top Pick April 11/11. Down 5.98%.) Funeral business is a good business based on changing demographics in Canada. It is a long-term, very well run company. He sees more growth coming.
(Market Call Minute.) If you bought it, it would be mostly because of the dividend. Very well managed. Thinks that Stewart Enterprises (STEI-Q) is more interesting.
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