Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
MXG reported sales of $27.2M, a 6.1% increase year-over-year driven by higher realized power prices, and partially offset by lower generation volumes. Net profits were largely flat year-over-year, and some of this was due to lower net realized gains on commodity swaps. These were OK results, and the stock continues to be expensive on valuation, and its small size and lack of coverage make it difficult to attract new investors. Its balance sheet is decent and margins are holding up OK, but growth is fairly muted overall, and we are not overly compelled here. Unlock Premium - Try 5i Free
He bought it as a value play with sum of the parts worth more than it was trading at. They are trying to sell some of the parts. Thinks they will sell all the parts and distribute the cash. $4-$5 breakup value. It is taking longer than he thought to break it up.
He bought on the basis that if it was broken up it would be worth more in parts. The results of the company are extremely good, however. They did not get the prices they were expecting so are hanging on.
A deep value play. Very small power producer in Alberta. Have assets in the US and France that are for sale. Thinks the company is going to be selling different parts of itself, which it has already started. On a breakup value, he feels this is worth $5-$6 as share. Very good value at this level.
Buys power plants and operate them globally. Has a replacement value of at least $5-$6. Affected by the price of electricity in Alberta, which have been falling. Management has a significant stake in the company. Could be a takeover candidate.
The chairman of First Energy (FE-N) took a major position of about 38%. Have a potential coal play bnext to one of their properties. Very thin. Very speculative.
MXG reported sales of $27.2M, a 6.1% increase year-over-year driven by higher realized power prices, and partially offset by lower generation volumes. Net profits were largely flat year-over-year, and some of this was due to lower net realized gains on commodity swaps. These were OK results, and the stock continues to be expensive on valuation, and its small size and lack of coverage make it difficult to attract new investors. Its balance sheet is decent and margins are holding up OK, but growth is fairly muted overall, and we are not overly compelled here.
Unlock Premium - Try 5i Free