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MFC Industrial Ltd. Message Board

  • dickeypiper1 dickeypiper1 Aug 14, 2013 7:54 AM Flag

    BV = 11.90

    Am not at all surprised by the operating results........hopefully there will be a lot of questions on the CC as that seems to be the only forum where we receive forward guidance/info/etc.

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    • dragon_legal_department dragon_legal_department Aug 14, 2013 12:02 PM Flag

      General takeaways from the call.
      Still rather more than opaque on forward guidance. Sounds like they have their hands full on integrating all their newer assets, but revenue is up nicely and they are working on margins.
      They are integrating some extremely diverse geographic and cultural operations. This may take some time.
      They are looking for a JV partner now for the Nat Gas property, as it appears the scope and breadth of what they want to do there have broadened considerably. Looks like the operational wells are doing quite well. This quarter should be even better with it's higher nat gas and oil prices.
      As an aside, the information on the German wood pellet operation seems to fall under the "what will they do next to make money" category.)
      I don't see, or expect much movement on Pea Ridge with their other challenges, and the low cost of ore currently.
      SGA and finance costs ate up profits, I expect the company to work on bringing those down and bringing margins up, which was a main theme of the call. A combination of both would be a home run. Nothing that shouldn't be solvable.
      Foreign exchange losses hit pretty hard in Q-2, as it did to many, if not most commodity companies.
      The dividend appears solid.
      There will no share buybacks. They plan to grow shareholder equity throw growth and operations instead.
      All in all not a bad quarter. Not a great quarter either, but considering how much they bit off recently, they are making okay progress chewing on it.

      Sentiment: Buy

    • Take out the FX loss and earnings are pretty close to flat, which isn't a bad result all things considered - add in that cash earnings tend to run a bit higher than GAAP with high D&A and you've got an 'ok' run rate valuation, esp. if you think they can do better on trade margins going fwd.

      The negatives - not clear what prospect for Pea Ridge is w iron ore looking oversupplied - tailings might be a one time gain - nat gas upgrade facility now looking longer term with plan to enlist partner - Wabush 2014 still kind of up in the air, although there are a few potentially positive scenarios, no major new executive appointments - I think people may run out of patience with MS if he doesn't begin to deliver more meaningful earnings growth in the next year.

 
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