Q: I would appreciate having your insights and comments on Major Drilling (MDI) as a possible investment.
5i Research Answer:
MDI saw revenues grow slightly along with margins improving slightly in its most recent quarterly earnings report. The forecast for 2024 displays flat EPS and marginal revenue growth. 2025 forecasts suggest marginal EPS and revenue growth. The valuation is cheap at 9.7x forward earnings but the stock has struggled in the last year down ~19%. The balance sheet is strong with a net cash position of $87M and cash from operations was also solid in the last quarter at $45.4M. We are not overly enticed by MDI, the valuation is cheap but there may not be anything significant in terms of growth.