Thursday, September 18, 2014

MacDonald, Dettwiler & Associates 2

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.

When I look at insider trading, I find no insider buying and no insider selling. Shares were not increased due to stock options, as shares for stock options are bought on the open market. Shares have, however, been increased due to the Employees Stock Purchase Plan.

There is some insider ownership with the CEO owning shares worth around $3.4M and the CFO owning shares around $2.3M. However, insider ownership is a very small part of outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.74, 18.62 and 22.51. These are slightly lower than the corresponding 10 year P/E Ratios. The current P/E Ratio is 23.78 based on a stock price of $84.65 and 2014 EPS estimate of $3.56. This stock price test suggests that the stock price is relatively expensive.

I get a Graham Price of $43.21. The 10 year Price/Graham Price Ratios are 1.61, 1.86 and 2.25. The current P/GP Ratio is 1.96 based on a stock price of $84.65. This stock price test suggests that the stock price is relatively reasonable.

The 10 year Price/Book Value per Share Ratio is 3.77. The current P/B Ratio is 3.63 a value some 3.6% lower. The current P/B Ratio is based on a stock price of $84.65 and a BVPS of $23.31. This stock price test suggests that the stock price is relatively reasonable.

Looking a P/CF and P/S Ratios do not help much is the P/CF Ratio test says that the stock is relatively expensive and the P/S Ratio test says it is relatively reasonable. The 10 year median P/CF Ratio is 11.03 and the current P/CF Ratio at 13.59 is some 23% higher. The 10 year P/S Ratio is 1.54 and the current P/S Ratio is 1.46 a value some 5% lower.

I cannot get any historical dividend yields as you need at least 4 years data for this and I only have 3 years of data. The 3 year median dividend yield is 2.00% and the current Dividend yield of 1.54% is some 23% lower. This stock price test suggests that the stock price is relatively expensive.

If you look at these values in absolute terms, the P/E Ratio of 23.78 is not particularly high. However, a P/GP Ratio of 1.96 is rather high. The P/CF Ratio at 13.59 and the P/S Ratio at 1.46 are not particularly high. However, what is certain is that the stock is not cheap as none of the ratios are low. However, none of the ratios are particularly high. The stock price maybe reasonable but the price is towards the higher end of a reasonableness range.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy. The consensus recommendation is a Buy. The 12 month stock price consensus is $93.70. This implies a total return of 12.23% with 10.69% from capital gains and 1.54% from dividends from current stock price of $84.65.

There is a recent CanTech report talking about this company becoming a global commercial satellite powerhouse. You can also see their archive of article on MDA from CanTech here. A recent number cruncher article in the G&M named this stock as one of twenty stocks that are good wealth creators.

Sound bit for Twitter and StockTwits is: Price may still be reasonable for this tech stock. See my spreadsheet at mda.htm.

This is the second of two parts. The first part was posted on Wednesday, September 17, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

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.

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. Follow me on Twitter or StockTwits.

No comments:

Post a Comment