Sound bite for Twitter and StockTwits is: Merger with DigitalGlobe. This could means that this is possibly another stock I will have to replace. It could be a reverse merger like Waste Connections was. The deal is to close in the second half of 2017. Price seems relatively cheap at present but takeover/merger with DigitalGlobe is an unknown. Price momentum is downward. See my spreadsheet on MacDonald, Dettwiler & Associates, but it is not updated as there is really not point in that.
I do not own this stock of MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech likes it also. It is a Tech stock with dividends.
The first thing that I noticed is that the stock price of the company is falling. It does not seem to positive about the merger or buy-out or whatever you want to call the deal with DigitalGlobe. This stock has been falling since August of last year and for this year it has basically just gone south. However a research note I read said that they thought that the acquisition of DigitalGlobe will be a positive potential catalyst. But they also called the market for commercial satellites challenging.
MDA's website is currently unavailable. The site does not say why. However, there are a number of places to pick up annual reports and other information so I do not need their site for this. But you have to sort of wonder what is going on when they say that their site is temporarily unavailable.
The year 2016 and the start of 2017 were not great for this company. Revenue and earnings are down but not by a lot. Revenue for 2016 was down by 2.5% and the 12 month period to the end of the first quarter compared to last year is down by 3.3%. Cash Flow was better in 2016, but only increased by 0.4% in 2016. Cash Flow for 12 months period to the end of the first quarter is down by 14%.
As far as dividends go, they only started to pay them in 2012 and there has been only one increase in dividends and that was in 2015. The Dividend Payout Ratio for 2016 for EPS was 40% but it is expected to be 62% in 2017. The 5 year median value is 47%. The DPR for 2016 for CFPS was 15% and is expected to be around 23% in 2017.
The Liquidity Ratio for this company is quite low being only at 0.86 in 2016. If you add in cash flow after dividends it is only 0.98. When this ratio is below 1.00, it means that the current assets cannot cover the currently liabilities. The preferred ratio is 1.50 or better. The rest of the debt ratios are fine.
The 5 year low, median and high median Price/Earnings per Share Ratios are 18.77, 22.50 and 26.10. The corresponding 10 year values are 17.56, 21.80 and 25.39. The historical ones are 14.22, 22.31 and 26.10. The current P/E Ratio is 26.52 based on a stock price of $62.85 and 2017 EPS estimate of 2.37. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham price of $40.96. The 10 year low, median and high median Price/Graham Price Ratios are 1.54, 1.86 and 2.28. The current P/GP Ratio is 1.53 based on a stock price of $62.85. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 3.51. The current P/B Ratio is 2.00 based on a stock price of $62.85 and BVPS of $31.45. The current P/B Ratio is some 43% below the 10 year median. The 10 year median is a little high at 3.51, but 2.00 is quite reasonable. This stock price testing suggests that the stock price is relatively cheap.
I get a 5 year median dividend yield of 1.85%. The current dividend yield at 2.35% is some 27% higher. The current dividend yield is based on dividends of $1.48 and a stock price of $62.85. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median P/S Ratio of 1.47. The current P/S Ratio is 1.14 based on 2017 Revenue estimate of $2,003M, Revenue per Share of $55.02 and a stock price of $62.85. The current P/S Ratio is some 22% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.
When I look at analysts' recommendations, I find Buy and Hold Recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month stock price is $83.18. This implies a total return 34.70% with 32.35% from capital gains and 2.35% from dividends based on a current price of $62.85.
Steve Symington on Motley Fool talks about MacDonald, Dettwiler & Associates impending merger with DigitalGlobe (NYSE:DGI). A Reuters report in the Financial Post says that MDA is buying DGI and will list on the NYSE as well as the TSX. Wayne Landers on Sports Perspectives talks about TD Securities reducing this company's target price from $86.00 to $83.00.
MacDonald, Dettwiler & Associates Ltd. is a global communications and information company providing operational solutions to commercial and government organizations worldwide. Its web site is here MacDonald, Dettwiler & Associates.
The last stock I wrote about was about was Ensign Energy Services (TSX-ESI, OTC-ESVIF)... learn more. The next stock I will write about will be Husky Energy Inc. (TSX-HSE, OTC- HUSKF)... learn more on Wednesday, May 31, 2017 around 5 pm. Tomorrow on my other blog I will write about Ensign and Mullen... learn more on Tuesday, May 30, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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