Opinions
The Panic-Proof Portfolio (Stockchase Research)
Magellan Aerospa
MAL-T
TOP PICK
Jul 31, 2025
Stock price when the opinion was issued
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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.)
He really likes this company. The multiple is very low. When he recommended it in the past, it was about 10X earnings. You only have to get a couple of multiple readings above that to get a much, much higher stock price. Last quarter wasn’t great, but thinks the cash flow generation is still there. The problem is that it is very illiquid, so for individuals it is a good one to own, but for institutions it is difficult.
(A Top Pick Feb 28/17. Up 17.83%.) A very low multiple stock. Trades at around 11.5-12×2018 earnings. Part of the reason is that there is not much liquidity with the company. All the other companies in this space trade at around 18X earnings. There is a good chance this company may eventually get taken out. He is going to continue to hold.
EPS of 11c beat estimates of 10c; Revenue of $235.2M missed estimates by 2.6%. EBITDA of $21.69M missed estimates by 10%. Revenue rose 5.3%. EPS rose from 7c in the prior period. EBITDA rose 17%. Canada revenue declined, but US revenue rose more than 20% on volume increases for fighter and wide-bodied aircraft. Strong growth is expected in 2024 overall. We would consider the quarter, OK, but not great. The stock remains cheap, but unexcitng.
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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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This 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)