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Mattr Corp. (MATR $8.22)
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North American Construction Group Ltd. (NOA $20.35)
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Major Drilling Group International Inc. (MDI $14.94)
Q: With precious metal prices at all time highs. Is now the time to look beyond the mining operations and to companies that support them. Was thinking about NOA and MATR.
What’s your thoughts about the two names or any suggestions you like in the sector.
Thank you.
What’s your thoughts about the two names or any suggestions you like in the sector.
Thank you.
5i Research Answer:
We commented on MATR yesterday.
NOA is very cheap at 10X earnings, with a 2.38% dividend. Debt is a bit heavy, at 3X cash flow. 30%+ earnings growth is expected this year, however. It does not have a good record of meeting estimates, and the last quarter missed by 3%. The stock is down 25% in a year. We want to like this one but it has missed six of the last eight quarters and this makes us more cautious. Insiders own 13% which is a positive.
We think MDI is better for this theme. It is more expensive, but much larger and has a debt-free balance sheet. Good growth is also very much expected.