This report should not be construed as providing investment advice. It is for educational purposes only.  Before making any investment decision, you should always do your own research or consult a investment professional.    
See my website on stocks or see my blog at the following sites.      www.spbrunner.com/stocks.html   www.spbrunner.blogspot.com/              
Pareto Corp         www.pareto.ca   PTO   Fiscal Yr: Dec 31                    
Year 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11   12/31/09 12/31/10   #Y    
Revenue*       $2.0 $10.8 $19.1 $38.7 $53.0 $51.1 $74.34 $77.16 $70.64 $90.34 <-12 mths   556.32% <-Total Growth 7 Revenue  
Increase       #DIV/0! 441.35% 77.74% 102.55% 36.66% -3.53% 45.54% 3.80% -8.46% 27.90%     56.25% <-IRR #YR->   7 Revenue  
Rev per Share       $0.09 $0.34 $0.58 $1.10 $1.42 $1.13 $1.69 $1.80 $2.17 $2.56     12.76% <-IRR #YR->   4 Revenue  
P/S (Price/Sales)       6.62 1.04 0.69 0.83 0.97 1.06 0.53 0.25 0.51 0.92     49.03% <-IRR #YR->   7 Rev Per share
Averages             P/S 10 Yrs 1.39 5Yrs 0.66       14.49% <-IRR #YR->   4 Rev Per share
*Revenue in M CDN $                        Yr 2010 Yr 2011              
        -$2.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $70.6                  
              -$38.7 $0.0 $0.0 $0.0 $0.0 $70.6                  
        -$0.09 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $2.17                  
              -$1.10 $0.00 $0.00 $0.00 $0.00 $2.17                  
$0.15 <-12 mths        
EPS*       -$0.14 -$0.02 $0.01 $0.07 $0.08 $0.04 $0.07 $0.08 $0.11 $0.18 $0.23 U 51.43% <-Total Growth 5 Earnings  
Increase         -87.86% -159% 600.00% 14.29% -50.00% 75.00% 14.29% 33% 69.81% 27.78%   #NUM! <-IRR #YR->   7 Earnings  
* ESP per share (Cdn GAAP)                           8.65% <-IRR #YR->   4 Earnings  
        $0.14 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.11                  
              -$0.07 $0.00 $0.00 $0.00 $0.00 $0.11                  
                                           
Sp Div                     $0.000 $0.000 $0.040 $0.000           Dividends  
Div*                     $0.040 $0.060 $0.085 $0.120   50.00% <-Total Growth 3 Dividends  
Increase                       50.00% 41.67% 41.18%   50.00% <-Average   2 Dividends  
Yield H/L                     5.71% 7.36% 5.01%     6.54% <-Average   3 Dividends  
Yield on Cl                     8.89% 5.45% 3.62% 5.11%   7.17% <-Average   3 Dividends  
Payout Ratio                     50.0% 56.6% 47.2% 52.2%   53.30% <-Average   3 Dividends  
Payout Ratio CF                     23.7% 34.0% 96.4%     28.89% <-Average   3 Dividends  
Average 5 Yrs     12.71% in 5 yrs 31.62% in 10 yrs Yield  6.03% 5.77% Payout 51.50% 51.38%   #NUM! <-IRR #YR->   9 Dividends  
* Dividends per share      20.00% 5 20.00% 10                 #NUM! <-IRR #YR->   4 Dividends  
    $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.06                  
              $0.00 $0.00 $0.00 $0.00 $0.00 $0.06                  
                                           
I am earning             TFSA $1.77 2010 6.78% Trading $1.22 2009 9.84%              
H/LYield held 5 yrs 13.79% 6.32% 7.66% 8.79%   Ave H/L Yield on your      Dividends  
H/LYield held 10 yrs 28.57%   Ave H/L original money     Dividends  
                                           
Graham No.           $0.17 $0.62 $0.80 $0.69 $0.96 $1.07 $1.18 $1.62 $1.83   Cl Pr higher/lower by?        
Prem /Disc. High           148.92% 76.56% 76.87% 145.44% 38.65% -6.75% -2.15%       68.22% <-Average   8 Graham price
Prem /Disc. Low           -13.17% 28.41% -0.35% 51.04% -6.18% -62.70% -59.16%       -8.87% <-Average   7 Graham price
Prem /Disc. Cl           131.55% 47.67% 70.64% 74.28% -6.18% -58.04% -6.40% 44.92% 28.21%   36.22% <-Average   8 Graham price
                                           
Price Cl     $0.55 $0.59 $0.35 $0.40 $0.92 $1.37 $1.20 $0.90 $0.45 $1.10 $2.35 $2.35     327.27% <-Total Growth 10 Stock Price  
Increase       7.27% -40.68% 14.29% 130.00% 48.91% -12.41% -25.00% -50.00% 144.44% 113.64% 0.00%     15.63% <-IRR #YR-> 10 Stock Price  
P/E         -20.59 40.00 13.14 17.13 30.00 12.86 5.63 10.38 13.06 10.22     11.40% <-IRR #YR-> 5 Stock Price  
Trailing P/E         -2.50 -23.53 92.00 19.57 15.00 22.50 6.43 13.75 22.17 13.06     16.80% <-IRR #YR-> 10 Price & Div  
Median 5 Yrs     2.23% 1.17% Div %  5, 10 yrs   Price Inc -12.41% P/E: Y-T 12.86 15.00       13.63% <-IRR #YR-> 5 Price & Div  
                                           
      -$0.55 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $2.35                
                -$1.37 $0.00 $0.00 $0.00 $0.00 $2.35                
      -$0.55 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.04 $0.06 $2.48                
                -$1.37 $0.00 $0.00 $0.04 $0.06 $2.48                
                                           
Price Ave H/L       $0.42 $0.38 $0.29 $0.95 $1.11 $1.37 $1.12 $0.70 $0.82 $1.70       303.57% <-Total Growth 9 Stock Price  
Increase       #DIV/0! -9.52% -23.68% 227.59% 16.84% 22.97% -18.32% -37.22% 16.43% 107.98%       16.77% <-IRR #YR-> 9 Stock Price  
P/E         -22.35 29.00 13.57 13.88 34.13 15.93 8.75 7.69 9.42       8.84% <-IRR #YR-> 5 Stock Price  
Trailing P/E         -2.71 -17.06 95.00 15.86 17.06 27.88 10.00 10.19 15.99       17.30% <-IRR #YR-> 9 Price & Div  
Median 5 Yrs     0.83% 0.53% Div %  5, 10 yrs   Price Inc 16.43% P/E: Y-T 9.42 15.99       9.67% <-IRR #YR-> 5 Price & Div  
                                           
        -$0.42 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $1.70                
                -$1.11 $0.00 $0.00 $0.00 $0.00 $1.70                
        -$0.42 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.06 $1.70                
                -$1.11 $0.00 $0.00 $0.00 $0.06 $1.70                
                                           
Hi Mths       Sep Jan Dec Aug Sep Mar Jun Jun Dec Sep                
Price Hi       $0.60 $0.59 $0.43 $1.10 $1.42 $1.69 $1.33 $1.00 $1.15 $2.49       315.00% <-Total Growth 9 Stock Price  
Increase         -1.67% -27.12% 155.81% 29.09% 19.01% -21.30% -24.81% 15.00% 116.52%       17.13% <-IRR #YR-> 9 Stock Price  
P/E       -4.29 -34.71 43.00 15.71 17.75 42.25 19.00 12.50 10.85 13.83       11.89% <-IRR #YR-> 5 Stock Price  
Trailing P/E         -4.21 -25.29 110.00 20.29 21.13 33.25 14.29 14.38 23.49                
Median 5 Yrs               Price Inc 15.00% P/E: Y-T 13.83 21.13                
                                           
        -$0.60 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $2.49                
                -$1.42 $0.00 $0.00 $0.00 $0.00 $2.49                
                                           
Low Mths       Jun Oct Oct Jun Jun Sep Dec Nov Jan Jan                
Price Low       $0.24 $0.17 $0.15 $0.80 $0.80 $1.04 $0.90 $0.40 $0.48 $0.90       275.00% <-Total Growth 9 Stock Price  
Increase       #DIV/0! -29.17% -11.76% 433.33% 0.00% 30.00% -13.46% -55.56% 20.00% 87.50%       15.82% <-IRR #YR-> 9 Stock Price  
P/E       -1.71 -10.00 15.00 11.43 10.00 26.00 12.86 5.00 4.53 5.00       2.38% <-IRR #YR-> 5 Stock Price  
Trailing P/E       #DIV/0! -1.21 -8.82 80.00 11.43 13.00 22.50 5.71 6.00 8.49                
Median 5 Yrs               Price Inc 20.00% P/E: Y-T 5.00 8.49                
                                           
        -$0.24 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.90                
                                           
Market Cap     $1.02 $13.16 $11.22 $13.27 $32.35 $51.14 $54.07 $39.60 $19.32 $35.84 $83.07                
                                           
# of Sh in M 1.860 22.312 32.056 33.176 35.160 37.328 45.058 43.995 42.931 32.584 35.349 35.349     Share capital     Shares  
Increase       1100% 43.67% 3.50% 5.98% 6.16% 20.71% -2.36% -2.42% -24.10% 8.49% 0.00%   127.85% <-Average   10 Shares  
CF fr Op $M 0.000 -2.198 -0.918 1.918 3.163 4.307 -1.100 0.617 7.232 5.746 3.118 <-12 mths   81.67% <-Total Growth 5 Cash Flow  
OPS $0.00 -$0.10 -$0.03 $0.06 $0.09 $0.12 -$0.02 $0.01 $0.17 $0.18 $0.09 <-12 mths   96.03% <-Total Growth 5 Cash Flow  
Increase         -71% -302% 56% 28% -121% -157% 1101% 5% -50%     67.23% <-Average   9 Cash Flow  
Non-cash -$0.049 $0.749 -$0.948 $0.008 -0.473 3.670 5.875 -0.697 0.984 2.439   #NUM! <-IRR #YR->   7 Cash Flow  
CF less Non-cash -$2.247 -$0.169 $0.970 $3.171 $3.833 $2.571 $6.492 $6.535 $6.730 $5.557 <-12 mths   14.41% <-IRR #YR->   4 Cash Flow  
CFPS -$0.10 -$0.01 $0.03 $0.09 $0.10 $0.06 $0.15 $0.15 $0.21 $0.16 <-12 mths   #NUM! <-IRR #YR->   7 Less non-cash
Increase     -95% -654% 209% 14% -44% 159% 3% 36% -24%   18.03% <-IRR #YR->   4 Less non-cash
P/CF on Cl -5.99 -12.23 6.92 10.23 11.87 -49.16 64.16 2.67 6.24 26.64            
Averages     P/CF 10 Yrs 3.86 5 Yrs 7.16          
*Operational Cash Flow per share              
$0.10 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.18        
-$0.09 $0.00 $0.00 $0.00 $0.00 $0.18        
                                         
OPM -111% -8.53% 10.03% 8.16% 8.13% -2.15% 0.83% 9.37% 8.13%     should be zero, it is a check on calculations          
Diff from Ave       1199.3% 0.2% -217.8% -195.9% -195.6% -74.7% -109.8% -210.1% -195.6%       0.00% <-Average   9 OPM  
*Operational Profit Margin (CF/Revenue) Ratio OPM 10 Yrs -8.51% 5 Yrs 4.86%                  
                          Q3 2010                
Curr Assets       $2.82 $4.10 $7.64 $11.69 $18.41 $23.32 $21.14 $18.71 $21.19 $31.51     Liq ratio of 1.5 and up, best   Assets  
Curr Liab.       $2.58 $4.87 $9.30 $14.19 $16.84 $19.19 $19.69 $17.77 $20.09 $30.59     1.01 <-Average   10 Liabilities  
Liquidity       1.09 0.84 0.82 0.82 1.09 1.22 1.07 1.05 1.05 1.03 <-----   1.10 <-Average   5 Ratio  
                                           
Assets       $4.77 $10.44 $14.77 $24.97 $31.92 $44.81 $46.59 $46.17 $49.76 $65.62     A/L ratio of 1.5 and up, best   Assets  
Liab.       $2.70 $6.72 $10.29 $16.14 $18.55 $21.07 $20.88 $18.74 $30.89 $42.67     1.83 <-Average   10 Liabilities  
Liquidity       1.77 1.55 1.44 1.55 1.72 2.13 2.23 2.46 1.61 1.54 <-----   2.03 <-Average   5 Ratio  
                                           
Book Value       $2.07 $3.72 $4.40 $8.67 $13.37 $23.74 $25.70 $27.43 $18.87 $22.95 $22.95   117.75% <-Total Growth 5 Book Value  
BV per share       $0.09 $0.12 $0.13 $0.25 $0.36 $0.53 $0.58 $0.64 $0.58 $0.65 $0.65   134.97% <-Total Growth 5 Book Value  
Change         25.05% 14.24% 85.82% 45.30% 47.11% 10.90% 9.37% -9.37% 12.11% 0.00%   1.2355 Current/Historical     Book Value  
P/BV (CL)       6.35 3.01 3.02 3.73 3.83 2.28 1.54 0.70 1.90 3.62 3.62 25.71% <-IRR #YR->   7 Book Value  
Change         -52.56% 0.04% 23.78% 2.49% -40.46% -32.37% -54.28% 169.71% 90.55% 0.00% 18.63% <-IRR #YR->   4 Book Value  
Leverage (A/BK)       2.30 2.80 3.36 2.88 2.39 1.89 1.81 1.68 2.64 2.86 0.00   2.42 <-Average   10 A/BV  
Averages               P/BV 10 Yrs 2.93 5 Yrs 2.05   2.08 <-Average   5 A/BV  
                                 
      -$0.09 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.58                  
            -$0.25 $0.00 $0.00 $0.00 $0.00 $0.58                  
                                      ROE  
ROE       -127.6% -12.4% 10.5% 28.7% 22.3% 6.5% 12.2% 13.0% 23.7% 24.8% <-12 mths   Net Income/Shareholders' equity       ROE  
5Yr Running Ave               8.7% 13.0% 14.0% 13.9% 14.4% 15.5% <-12 mths              
                                         
Net Income       -$2.64 -$0.46 $0.46 $2.49 $2.98 $1.55 $3.13 $3.56 $4.48 $5.68 <-12 mths     Income Statement      
Oper C. F.       -$2.20 -$0.92 $1.92 $3.16 $4.31 -$1.10 $0.62 $7.23 $5.75 $3.12 <-12 mths     Cash Flow Statement       
Invest. C. F       -$0.15 -$1.28 -$0.17 -$4.56 -$0.48 -$5.86 -$3.56 -$6.31 -$2.62 -$2.62 <-12 mths     Cash Flow Statement      
Total Accruals       -$0.29 $1.73 -$1.28 $3.88 -$0.85 $8.51 $6.07 $2.63 $1.36 $5.19 <-12 mths              
Total Assets       $4.77 $10.44 $14.77 $24.97 $31.92 $44.81 $46.59 $46.17 $49.76 $65.62 <-12 mths     Balance Sheet        
Accruals Ratio       -6.13% 16.60% -8.70% 15.55% -2.66% 18.98% 13.03% 5.70% 2.73% 7.91%                
up/down/neutral                                          
Chge in Close       7.27% -40.68% 14.29% 130.00% 48.91% -12.41% -25.00% -50.00% 144.44% 113.64%                
Any Predictions?                                        
                                           
Fin. C. F       $3.51 $1.72 -$0.94 $1.41 $0.30 $6.90 -$2.45 -$1.21 -$2.83 -$2.83 <-12 mths              
Total Accruals       -$3.80 $0.02 -$0.34 $2.47 -$1.15 $1.61 $8.52 $3.85 $4.19 $8.03 <-12 mths              
Accruals Ratio       -79.80% 0.15% -2.30% 9.89% -3.60% 3.59% 18.29% 8.33% 8.43% 12.23% <-12 mths              
                                         
                                         
Apr 17, 2010.  Company had annouced special dividend of $.04 and regular of $.015 for January 2010.                                    
In June 2009 I picked up earnings estimates for 2009 and 2010 of $.10 and $.12.  I see no reason to change these.                                    
Aug 2009.  I decided not to submit my shares.  I just bought this company in June 2009 and I am not ready to sell.                        
Aug 2009.  The independent valuator concluded that in its opinion, the fair market value of Pareto at June 30, 2009 was between $49,920,000 and $58,510,000 or between $1.06 and $1.23 per Share.       
Pareto is making the Offer to provide a liquidity opportunity for shareholders and because the Board of Directors and management believe that the Shares have been trading in price ranges which do not fully reflect       
the value of Pareto's business and future prospects. Future values cannot be assured, however, and are subject to risks.                      
OTC - PETOF; name chge in 2002                                      
On July 3, 2002, the legal name of the Company was changed to Pareto Corporation from Caxton Group Inc. Caxton Group Inc. was the result of the amalgamation of Alouettes 1974 Capital Inc., a public       
capital pool company listed on the Canadian Venture Exchange, and Caxton Group Inc.                            
Some analysts feel that Ooperational Cash Flow should not include non-cash items.  I have used both types of cash flow.                      
                                           
How they make their money.                                      
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,                                           
In-Retail Messaging, Direct Marketing, and Incentives.                                          
                                           
Ownership: Kerry Shapansky, CEO appears to own about 10%                                          
                                           
For most ratios, lower is better when looking for a good stock price.  However, there are exceptions such as for yield and asset/liability ratios and here you want a higher ratios to indicate a good stock price.        
Also, for the Operational Profit Margin, a higher percentage is better.  With the OPM, you should only compare companies in similar industries.                  
                                           
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