A Stock to Die For – Carriage Services, Inc.
CSV [NYSE] December 3, close: $2.28. 52-week range: $1.85 (Nov. 7, 2008) - $11.06 (Dec. 5, 2007)
Carriage Services provides death care merchandise and services including funerals, cremation, caskets, funeral home and cemetery facilities etc. They operate 136 funeral homes and 32 cemeteries in 11 states.
CSV shares have plummeted from over $11 after a proposed buyout of the company was cancelled. Management has been actively taking advantage of what they feel is a major undervaluation in the share price by repurchasing shares. Through October they had retired over 1.347 million shares [out of 19.22 million outstanding at Y.E. 2007] at an average cost of $3.68 /share.
Company Insiders have been steady buyers also with 11 separate open-market purchases since July 3rd at prices ranging from $7.17 down to $1.99.
Recent Insider Trading Activity: Carriage Services Inc
Date Name Transaction Num Shares Price(s) Value
11/12/08 FORBES GARY L
Purchase 5,000 $2.00 10,000.00
11/07/08 PAYNE MELVIN C
Purchase 37,500 $1.99 74,625.00
11/07/08 DODDS JAY D
Purchase 8,000 $1.99 15,920.00
10/06/08 DAVIS JOE ROBERT
Purchase 3,283 $3.65 11,982.95
10/06/08 FORBES GARY L
Purchase 1,635 $3.05 4,986.75
09/19/08 FORBES GARY L
Purchase 5,000 $3.25 16,250.00
09/10/08 DODDS JAY D
Purchase 6,250 $3.80 23,773.13
09/08/08 PAYNE MELVIN C
Purchase 10,000 $3.88 38,759.00
07/03/08 FOSTER VINCENT D*
Purchase 4,408 $7.17 31,605.36
07/03/08 DAVIS JOE ROBERT
Purchase 1,729 $7.17 12,396.93
07/03/08 FORBES GARY L
Purchase 974 $7.17 6,983.58
Earnings have been decent with the past three years’ per share numbers shown here:
Year……Sales ….. Cash Flow …… Earnings …. Book Value
2006 …..$8.12 ……. $0.67 ……….. $0.20 ……… $5.18
2007 …..$8.73 ……. $0.89 ……….. $0.39 ……… $5.56
2008 …..$9.75 ……. $0.99 ……….. $0.23 ……….$5.80
*2008 figures include Q4 consensus estimates
Regardless of how bad economic conditions may get, people are still going to die. Carriage Services shares now trade at just under 10 times 2008 estimates and 6.7 times the company’s own projection of $0.34 for 2009. CSV also now trades at a 60% discount to book value.
Management has expressed confidence in their future by buying shares for themselves and for the company. They have shown a willingness to sell the entire firm and a renewed offer by another industry player is a distinct possibility for the future. Even a lower offer than was on the table previously might see a doubling or tripling of today’s share price.
What price target seems reasonable here? CSV shares hit peak prices of more than book value in 2005 – 2006 and 2007. Even one times current book value would bring shares back towards $6 within a year or up more than 160%. A price/earnings of just 10x 2009 projections leads to a $3.40 price over the next 13 months or + 49%.
Is it realistic to think we could see $5 or higher over the next year or two?
These shares traded at $5.50, $6.75, $5.25, $11.09 and $9.45 at their highs in each calendar year from 2004 right through 2008. In fact, excepting recent weeks, the absolute lows in those same years ran from $3.72 (in 2004) to $4.12 (in 2006). Even those old lows would provide a very nice return from the current price.
Disclosure: Author is long shares of Carriage Services.
Still more insider buying on Carraige Services.
CSV closed at $4.06 yesterday - up over 78% since my write-up last December.
This may benefit if the Swine flu causes as many otherwise-avoidable deaths this winter as the US Dept. of Health is predicting.
ERICKSON, RONALD .. Date …………………… # shares …….Avg. Price
Director
……………… 2009-10-05 …….. Buy …….. 3351 ……… $3.86
HEILIGBRODT, WILLIAM
Director
…………….. 2009-10-05 …….. Buy …….. 1675 ………. $3.86
SCOTT, RICHARD
Director
……………… 2009-10-05 ……… Buy ……. 1420 ………. $3.86
FOSTER, VINCENT
Director
……………… 2009-10-05 ……… Buy …….. 3351 ………. $3.86
HEILIGBRODT L WILLIAM
Director
…………….. 2009-07-08 ………. Buy …….. 1664 ………. $3.53
HEILIGBRODT L WILLIAM
Director
…………… 2009-07-08 ……….. Buy …….. 1664 ………. $3.53
FOSTER, VINCENT
Director
…………… 2009-07-07 ……….. Buy …….. 11214 ……… $3.37
ERICKSON, RONALD
Director
……………. 2009-07-07 ……….. Buy ……… 3639 ………. $3.53
CSV was recommended on Dec. 4, 2008 at a price of $2.28 /share.
CSV closed Jan. 15, 2010 at $3.98 for a gain of + 73.2% so far.
Carriage Services Announces 2009 Record Fourth Quarter and Year End Results
Carriage Services, Inc. (CSV) today announced results for the fourth quarter and year ended December 31, 2009.
YEAR 2009 FINANCIAL RESULTS
Melvin C. Payne, Chairman and Chief Executive Officer, stated, “I am proud beyond words of the amazing job our operating leaders and employees performed in 2009 during the worst economic and financial crisis since the Great Depression. We finished the year with a strong fourth quarter, including record Total Revenue of $45.1 million, record Consolidated EBITDA of $10.4 million and record tying EPS of $0.10 versus a GAAP EPS loss of $0.09 in 2008. But even though the fourth quarter was great, it was the full year 2009 performance that signaled completion of our transformation over the last six years into an outstanding deathcare operating company.” Highlights of the 2009 year compared to 2008 performance (before special charges) were as follows:
Record Total Revenues, up $700,000 or 0.4% from 2008 to $177.6 million;
Record Cemetery Preneed Property Revenue, up $4.2 million or 25.5% from 2008 to $20.8 million;
Record Field EBITDA, up $2.3 million or 3.9% from 2008 to $61.6 million;
Record Consolidated EBITDA, up $2.3 million or 5.9% from 2008 to $41.5 million;
Consolidated EBITDA Margin of 23.3%, up 120 basis points from 22.1% in 2008;
Record EPS of $0.40 under current accounting rules, up 33% from Adjusted EPS of $0.30 in 2008;
Record Total Trust Fund Market Value, up $60 million or 43.0% to $198.1 million at year end 2009 compared to year end 2008;
Completion of our $10 million Stock Repurchase Program during which we repurchased 3.1 million shares equal to 15% of fully diluted shares outstanding.
“We had so many performance heroes in our company during 2009 that it would be impossible to list or mention them all, but suffice it to say that they know who they are and realize that each of them made an important contribution to our total company performance,” continued Mr. Payne. “More than anything else, our record performance in 2009 was not only differentiating within the universe of most public companies, it was confirmation that our Standards Operating Model in combination with our 4E Leadership Model has achieved broad traction and effectiveness and has become the defining framework for Carriage’s high performance culture.
“We made two small but strategic acquisitions in the fourth quarter of 2009 and are actively evaluating candidates using our Strategic Acquisition Model. As consolidation of our industry continues, we are confident that we can selectively grow by acquisition which will be a smart use of our capital and add substantial value to our shareholders over the next five years.”
FOUR QUARTER OUTLOOK 2010
“After the record performance of 2009, we are confident that our 2010 performance will be even better, so we are raising all of our key performance metrics for the four quarters ending December 31, 2010, including earnings to be in the range of $0.42 - $0.45 per diluted share,” concluded Payne. Feb 18 01:52 PM EditReply +10