# Savaria Corp (SIS.TO)



## londoncalling (Sep 17, 2011)

Saw this ticker on the CMF What are you buying thread. Very interesting small cap play. Low volume. Shareholder friendly management and ownership (2 Mr. Bourassa's) have 59% Increasing dividends. Great Quarterlies. Company with a10 year history. Decent yield and P/E. What's not to like? (not a rhetorical question). What am I missing aside from the share price appreciation over the last year? Still have more DD to do but what I have seen thus far looks pretty nice.

Cheers


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## martinv (Apr 30, 2009)

I have been buying recently @ $3.40 and $3.25. It is part of what I call my "Small Cap " portfolio.
The market cap is 96.1 million.
The dividend is attractive at 4.2% with a payout ratio of 42% for the trailing twelve months or 61.9% for the past fiscal year.
There are 23 million shares of which Fiera capital Corporation purchased 1,128,000 ( 4% ) on march 31, 2014 according to Morningstar.
I am looking at at least a 5 year holding unless there are substantial changes.


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## londoncalling (Sep 17, 2011)

Thanks for the reply martin as well as bringing this one to my attention originally. Still need to investigate. Definitely high on my watch list.


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## Crusher (Sep 15, 2013)

What's not to like? That it's been very stagnant for a microcap. 2010-2011-2012 revenue = same. 2013-14 is looking good, but nothing crazy. Is there any evidence that they're expanding, making acquisitions, anything? First impression leaves me pretty indifferent about this stock. I wouldn't mind holding it, and will be keeping track, but I'm not loving what I see.


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## humble_pie (Jun 7, 2009)

london didn't you have a post a while ago about another company in the same field? or was it this company?

here's an old article from 2008. CEO marcel bourassa probably hasn't changed much. What he learned to do was exchange manufacturing in hi-cost laval quebec for manufacturing, first in slightly less expensive ontario & then, very soon, for manufacturing in china, sending his son Sebastien to china as resident pooh-bah for the company.

http://affaires.lapresse.ca/economi...de-savaria-hauts-et-bas-dun-manufacturier.php

in 2008, a strategic alliance had been struck with Wu Len, a chinese engineer who studied at mcGill in montreal & then joined Savaria in laval. I don't know whether mr. Wu still manages chinese manufacturing operations today. The facility moved to a new location with double the size in 2013, indicating that all is going well for savaria in huizho.

i'm not crazy about the fact that bourassa & his brother jean-marie, who is savaria's CFO, controlled 55% of the shares in 2008. Presumably son & heir sebastien has another big chunk. Engineer Wu Len, probably not so much.

then there's the recent april 2014 secondary share offering. Here's the news release describing it. Look closely.

https://ca.finance.yahoo.com/news/savaria-announces-16-250-000-115300525.html

the issue price was $3.25 per unit, each unit consisting of one share plus one-half warrant to purchase for the next 36 months.

the news release confirms that the offering was priced at 8% below market price at the time.

one-fifth of that offering, being one million shares, went to a private holding company equally owned by the bourassa brothers.

see? the bros helped themselves to another million shares at a price 8% less than market.

to comply with TSX rules that a secondary share issue that is going to be priced well below market must obtain shareholder approval, the bros themselves signed the necessary written approval for the new shares to be issued to themselves. After all, with 55% of the shares, the bros were far & away the majority shareholders.

there's nothing wrong with this, but shareholders might want to keep in mind that the company appears to be the plaything of the two brothers.

another thing that bugs me, in the la Presse article, is marcel bourassa keeps on laughing. Check out the verb "rire."

bourassa closes his factory in laval & lays off all his old friends, he laughs. His company share price hits the dirt, he laughs. Even for francophone journos, who sometimes use the verb "laughs" where an anglophone journo would use the verb "says," bourassa has got a sense of humour that i don't share.

moi je doute que je m'en aille plus loin dans ce coin-ci.


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## londoncalling (Sep 17, 2011)

humble_pie said:


> london didn't you have a post a while ago about another company in the same field? or was it this company?
> 
> here's an old article from 2008. CEO marcel bourassa probably hasn't changed much. What he learned to do was exchange manufacturing in hi-cost laval quebec for manufacturing, first in slightly less expensive ontario & then, very soon, for manufacturing in china, sending his son Sebastien to china as resident pooh-bah for the company.
> 
> ...


Thanks pie. Not sure which stock I posted about. I tend to be a bit of a scatterbrain these days. However in my research today I became aware of the warrants. It was a bit of a concern to see them finance by issuing equity without losing control of % of ownership. Talk about having your cake and eating it too. 

Google finance showed a 13 cent dividend being paid on March of this year yet I see no new article indicating such.

Still keen yet cautious


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## doctrine (Sep 30, 2011)

This looks like a nice business, trading at a P/E of 15-16. A good, likely sustainable dividend for sure. I am not sure it is worth the classic small-cap premium though. I prefer to buy in this sector at or below a P/E of ~10. I certainly would hold at this level if I was already holding onto a 50% gain. Furthermore, I am not a fan of private placements. I guess what I'm saying is, I would have liked to be in this company about a year or more ago.


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## martinv (Apr 30, 2009)

Noticed that Savaria is one of my few stocks that isn't in the "red" lately. I have only only owned it for about one month but they recently made a small acquisition and increased the dividend.
So far so good but we will see how things turn out in a year or 5.


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## martinv (Apr 30, 2009)

Bought Savaria ( SIS ) in August last year and it has been my best performing stock. From 3.32 to 5.50 today for a 65% (paper) gain plus a nice dividend. Certainly didn't expect that much from this small cap.
Now if we could just get LRE and TPH out of the "woodshed"!


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