Q: Hi Peter, Can I get your thoughts on Maxim quarterly results. Also can you provide your opinion on the company and whether it is a buy hold or sell. Also is sale of the business a real possibility - the company looks clean and has no debt and simple share structure in an attractive sector.
Thanks
Thanks
5i Research Answer:
MXG has no analysts and thus no estimates to 'beat'. The company reported a net loss of $341,000 or 1c per share, compared with net income of $19.5M or 32c per share in the same period in the prior year. Revenue fell to $24M from $39M. Free cash flow was negative $1M vs positive $33.8M. The company is debt-free and recent asset sales will add some cash. But the quarter itself was pretty bad. Still, for the year cash flow was better, and it may make more sense to merge with a bigger company. Insiders own 78% so it would only happen in a friendly deal. The stock is not that cheap, though, at 20X earnings, even after its decline this year. The main holders are more likely to be very long term players.