Q: Hi Peter,
Both MDA and FTG are experiencing negative momentum. Please compare their financial situation and future revenue projections. With year-end selling, which one would you prefer to buy at the current valuation for a 3 year hold and why? Thanks.
Both MDA and FTG are experiencing negative momentum. Please compare their financial situation and future revenue projections. With year-end selling, which one would you prefer to buy at the current valuation for a 3 year hold and why? Thanks.
5i Research Answer:
MDA has about $265M net cash and is currently producing very strong cash flow. Estimates call for EPS to more than double in 2025 (all in) but only rise about 10% in 2026. Much of its business depends on contracts and there is some uncertainty here (see recent Q&A comments). The stock has been hit hard.
FTG is much smaller, but the stock is up 54% this year and close to its high. It may not see much year end selling. It is also more expensive than MDA now on valuation. The balance sheet is fine, and about 30% growth is expected next year. We are comfortable with it, but if an investor is looking for a year end 'bounce' trade then MDA looks better.