Clarke Inc T.CKI

Price to book

[Torontojay]

Historically Clarke has always traded at around a price to book ratio of 0.85. Today, you can purchase shares at about 0.66 times book value. If it gets back to its historical average we should be at $ 11.46. 

Since 2002, the company has increased its book value per share + cumulative dividend growth of 12.3% per year. Book value per share has increased by 9.3% per year. If the company can continue to grow its book value per share at 9.3% for the next 5 years then I can conclude the following; 

1) I may earn 9.3% on my money excluding dividends and about 12.3% on my money including dividends if the company maintains a price to book value of 0.66. 

2) I will double my money excluding any future dividends if the company can continue to grow its book value by 9.3% per year and trade at a price to book value of 0.85. 

Not a bad deal. In a worse case scenario I will likely earn double digits on my investment. In a best case scenario I should at least double my money in 5 years excluding any future dividends.

[SusanBolland]

[SusanBolland]

[Torontojay]

It looks like we are right around its historical price to book ratio. 

[Paddy902]

I hate to admit I sold a few shares at $12 simply as this was becoming too large a position....but heck with this drop, I'm inclined to buy them right back again. Trican having a nice run. This really not a name for trading, but to accumulate at this level relative to book is a good deal. 

[Torontojay]

If you were to fairly value their real estate position which is worth well over one hundred million, then I would say that there's more appreciation ahead.  We are trading at about 85-90% of book value but much less according to my estimated market value for these assets. Given the rise in real estate and the increase in oil, I would say they could sell off these assets and return at

[Torontojay]

Currently at a price to book of ~ 0.72 which is historically at around 85% of book value. The company is worth a heck of a lot more than its book value. This is about a 15% discount to where it should be at.  Great little company.