MPC Container Ships ASA's (OB:MPCC): MPC Container Ships ASA owns and operates container ships. The company’s loss has recently broadened since it announced a -US$1.6m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$18.3m, moving it further away from breakeven. The most pressing concern for investors is MPCC’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for MPCC.
Consensus from the 2 Shipping analysts is MPCC is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of US$8.1m in 2020. So, MPCC is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which MPCC must grow year-on-year. It turns out an average annual growth rate of 113% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, MPCC may become profitable much later than analysts predict.
Underlying developments driving MPCC’s growth isn’t the focus of this broad overview, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. MPCC currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in MPCC’s case is 58%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
There are key fundamentals of MPCC which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at MPCC, take a look at MPCC’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further examine:
- Valuation: What is MPCC worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether MPCC is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MPC Container Ships’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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