U.S. Markets closed

Magellan Aerospace Corporation (TSE:MAL): The Best Of Both Worlds

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Attractive stocks have exceptional fundamentals. In the case of Magellan Aerospace Corporation (TSE:MAL), there's is a company that has been able to sustain great financial health, trading at an attractive share price. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, read the full report on Magellan Aerospace here.

Flawless balance sheet and good value

MAL's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. MAL seems to have put its debt to good use, generating operating cash levels of 1.58x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. MAL's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, MAL's share price is trading below the group's average. This further reaffirms that MAL is potentially undervalued.

TSX:MAL Intrinsic value, July 16th 2019

Next Steps:

For Magellan Aerospace, I've put together three relevant aspects you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for MAL’s future growth? Take a look at our free research report of analyst consensus for MAL’s outlook.
  2. Historical Performance: What has MAL's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MAL? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.