June 23, 2013 Comments

I have updated the article on long-term historical asset class performance for the first half of 2013. Given the weak performance of bonds and especially Gold in the first half of 2013, I thought it was worthwhile to update this article.

FirstService is updated and rated Weak Buy / Hold at U.S. $29.75 or CAN $31.10. I have followed this company since 2002 and I respect the management. Around Edmonton its Colliers International signs are ubiquitous. I currently having one of its franchise companies College Pro painters do a little exterior painting for me. So I was hoping the numbers would look good. Unfortunately the profitability does not look strong and the accounting is quite complex. Things could look a lot better going forward since it has just eliminated its preferred shares which were an expensive form of financing (They paid 7% and were not tax deductible to the company, meanwhile it si able to borrow 12 year money at 4%). On the other hand they may face a goodwill write-off their operation that looks after foreclosed houses in the U.S. Overall it looks best to give this company a pass. Any buying would have to be considered quite speculative.


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