Opinions Peter Imhof
Magellan AerospaceMAL.TOTOP PICKFeb 28, 2017
Peter ImhofStock price when the opinion was issued
As of Aug 14, 2026. Market Open.
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Premium contentWe again reiterate MAL as a TOP PICK. The company is front and centre on defense projects in Canada, including maintenance for the new Swedish fighter jets and development of light anti-tank weapons for the Canadian Federal government. Cash reserves are growing while debt is retired and shares bought back. We continue to recommend a stop at $29, looking to achieve $42 -- upside potential of 18%. Yield 0.5%
(Analysts’ price target is $41.50)
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Seeing decade-long demand. Huge demand in defence, plus big aircraft parts replacement cycle. Lots of spare capacity, so new work comes with high, incremental margins. As a result, big pickup in FCF generation. Yield is 0.67%.
(Analysts’ price target is $38.75)
Andrey OmelchakPremium contentWe again reiterate MAL as a TOP PICK. The Canadian company sees its defense industry products having lots of runway ahead. Recently reported earnings showed a 52% increase in net income over the year, growing cash reserves and they plan to continue to buy back shares. We recommend trailing up the stop (from $22) to $26, looking to achieve $41 -- upside potential over 30%. Yield 0.6%
(Analysts’ price target is $41.50)Premium content
High insider ownership, so company is relatively undiscovered. One investor owns more than 50% of the company -- so it doesn't screen well for institutional investors. Business is booming.
Defense (~30% of its business, and he anticipates 45-50% in future) and aerospace. Good backlog. Seeing record requests for proposals, especially on defense. Huge operating leverage to get higher margins, which will increase FCF. One of the cheapest in the sector within NA. Yield is 0.83%.
Andrey OmelchakPremium contentWe reiterate MAL as a TOP PICK. Recently reported earnings demonstrated growing cash reserves, while debt was retired and shares bought back. Purchasers of their airplane components have large backlog orders from 2025 leftover and spending on defense aviation is expected to grow. We recommend trailing up the stop (from $18) to $20, looking to achieve $29 -- upside potential of 20%. Yield 0.8%
(Analysts’ price target is $28.00)Premium contentWe reiterate MAL as a TOP PICK. As a Canadian based aerospace developer the recent Federal government military spending plans will be positive. It trades at 25x earnings and under 2x book. Latest reported cash reserves are growing, while debt is retired and shares bought back. We continue to recommend a stop at $18.00, looking to achieve $25.50 -- upside potential over 15%. Yield 0.9%
(Analysts’ price target is $24.00)Premium contentPremium contentWe reiterate MAL, the Canadian based aerospace company with global market reach as a TOP PICK. Just over one-third of revenue is derived from defense spending. They are providing key engine components for South Korea and are involved with the Gripen fighter that Canadian is considering for purchase. It trades at 27x earnings and 1.3x book. Previously reported earnings showed good cash reserve growth, while they retired debt and bought back shares. We recommend trailing up the stop (from $13.00) to $15.50, looking to achieve $22.00 -- upside potential of 23%. Yield 1.1%
(Analysts’ price target is $22.00)Premium contentWe reiterate MAL as a TOP PICK. Recently reported earnings showed a 17% increase in EPS and a 25% increase in gross profits. The aerospace parts maker relies on the US for less than 25% of its revenues with the balance primarily in Canada and the rest in Europe (military/defense accounts for about a third of revenues). It trades at 24x earnings and 1.1x book. Cash reserves are growing, as debt is retired and shares bought back. We continue to recommend a stop at $13, looking to achieve $21 -- upside potential over 30%. Yield 0%
(Analysts’ price target is $21.00)Premium contentThis Canadian aerospace manufacturing company has formed broad agreements recently with India and Korea. Recently reported earnings showed a 70% increase in quarterly income, allowing cash reserves to grow while debt was retired and shares bought back. It trades at 24x earnings and 1.2x book. Its dividend is backed by a payout ratio under 20% of cash flow. We recommend setting a stop-loss at $13, looking to achieve $21 -- upside over 22%. Yield 1.1%
(Analysts’ price target is $21.00)The stock is cheap, and acting better. The sector (in the US, mostly) has been seeing some good numbers recently. It hit a 52-week high this week. We think it can be held, and >$10 is possible, even $12 under good conditions. $16 we think would be a stretch.
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Manufactures components for Airbus and Boeing. Trading at 11X trailing earnings and 10X forward earnings. They’ve done an incredible job. At some point, maybe they buy something, and then they can add some liquidity. A good balance sheet. They’ve grown the earnings at 24% over the last few years. Dividend yield of 1.5%. (Analysts’ price target is $23.25.)