Stock Idea…Magellan
Aerospace Corp
Symbol : MAL
Exchange: TSX
Market Cap : 1.2 Billion
Revenue : 985 Million
Three Year Revenue Growth : 10.1 %
Investment Type : Small Cap / Mid Cap Value
Three Year Revenue Growth : 10.1 %
Investment Type : Small Cap / Mid Cap Value
Price/Earnings : 11.2
Price/Book : 1.8
Price/Sales : 1.2
Price/Cash Flow : 9.8
Price : 19.91
Investment Stem : Cheap Small Caps Screen
Investment Stem : Cheap Small Caps Screen
Magellan Aerospace Corporation is a Canada-based
supplier of components to the aerospace industry and in certain applications
for power generation projects. The Company engineers and manufactures
aeroengine and aerostructure components for aerospace markets, including
products for defense and space markets, and complementary specialty products.
Its segments include Aerospace and Power Generation Project. The Aerospace
segment includes the design, development, manufacture, repair and overhaul, and
sale of systems and components for defense and commercial aviation. The Power
Generation Project segment includes the supply of gas turbine power generation
units. Within the Aerospace segment, the Company's product groupings include aerostructures
and aeroengines. It manufactures complex cast, fabricated and machined gas
turbine engine components, both static and rotating, and integrated nacelle
components, flow paths and engine exhaust systems for various aeroengine
manufacturers.
Another cash flow
positive company with a debt to equity ratio of 18 percent, this one serving the aerospace industry with
operations pretty well evenly distributed between Canada, the US and Europe. Entrenched relationship with it's major customers, Boeing and Airbus, which together make up about 40% of the company's sales. The
company’s relative small size and low liquidity put it under the radar of many
institutional investors despite the fact that the company has experienced
steady organic revenue growth over the last 10 years with increasing profit
margins.
The dreaded metrics
from Morningstar…
http://quote.morningstar.ca/Quicktakes/stock/keyratios.aspx?t=MAL®ion=CAN&culture=en-CA&ops=clear
The company’s
website…
http://magellan.aero/
Another free cash flow company from my scan of the Canadian market on July 8th. Has a cash return of 3.8% (by way of comparison, the 10 year Canadian Bond currently sits at 2.03%). If you have faith in the global aerospace market this could be an interesting investment idea. Investing in the small and mid cap sectors of the market is the gift that keeps on giving in that it is generally under followed and under appreciated. Few of these stocks will be over-owned like the giant large caps that are always in the news in the states. The stocks in the small and mid sectors of the market generally have low expectations and few followers making earning surprises occur more on the upside instead of the downside.
Another free cash flow company from my scan of the Canadian market on July 8th. Has a cash return of 3.8% (by way of comparison, the 10 year Canadian Bond currently sits at 2.03%). If you have faith in the global aerospace market this could be an interesting investment idea. Investing in the small and mid cap sectors of the market is the gift that keeps on giving in that it is generally under followed and under appreciated. Few of these stocks will be over-owned like the giant large caps that are always in the news in the states. The stocks in the small and mid sectors of the market generally have low expectations and few followers making earning surprises occur more on the upside instead of the downside.
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