Stuart Olson Inc CUUHF

EPS run-rate is better than 4Q2017 results

[RetailRube]

Look on page 19 of the 2017 Annual Report (available on sedar.com).  In the Three-Month Results section, it says:  "Corporate Group administrative costs were $12.6 million, compared to $4.5 million in the fourth quarter of 2016.  This $8.1 million increase or 180% increase is primarily related to higher share-based compensation expense associated with the impact of marking-to-market our share-based compensation plans for changes in our share price, ..."

The share price ended 2017 at just over $7 after hovering in the $5.25 range for much of the year.  The increase meant we will have to reward the executives, so they accrued the comp expense.  But this is a one-time charge to earnings, unless the stock price increases $1.75 each quarter.  That means the earnings run-rate should be about $8 million, minus 28% for income taxes which gives $5.8 million higher earnings than SOX printed in 4Q2017.  Now, SOX earned $5.7 million in 4Q2017, which is $0.18/share fully diluted.  The quarterly dividend is only $0.12 per share.  So my simple analysis says eps would have been double in 4Q2017 excluding this compensation expense increase.

Therefore 1Q2018 earnings (available around May 15?) could knock it out of the park.  THEN maybe the shorts will be forced to cover.