Maca Limited – Battered Miner with hope – ASX:MLD

2nd March 2015

Corporate Snapshot

Market Cap (as of 2 March 2015): $226 M
Share Price: $1.10
Cash @ 31 December $ 94 M

Dividend (last FY) $0.32 (100% Franked) = $0.45 (Taxable)

Current Yield = 41% ( probably a bit too good to be true)

IMHO:
Maca Limited is a mining and civil construction company
mainly working in Western Australia, although have recently negotiated a large south american contract
heavily leveraged to the mining industry
healthy cash Balance
1.47B work in hand (how much of that will be lost due to the mothballing of mining projects
Profit for HY15 – 33.2
EPS for HY 15.73
Current PE on HY15 figures 7
NPAT Margin = 10%

good safety performance LTI free for last 12 months ( which is great for a mining related company)

Work in Hand
FY 15 – Revenue 611 = expected NPAT = 61 M
FY 16 – Revenue 380 = expected NPAT= 38 M
FY 17 – Revenue 335 = expected NPAT= 34 M

in the current environment, it seems to have been put into the mining bucket with the expectations of bad returns but even if the FY17 Revenue is halved and NPAT is reduced to 17 the expected PE will still be in the range of 13 which is the historic ASX average

Cash Balance = healthy = $0.40 per share
Net Assets/ Mkt Cap = 1.13 (anything above 1 is good)
NTA = 1.07 per share

2 analysts give it a buy rating
http://au.investsmart.com.au/shares/asx/Maca-MLD.asp

risky as it depends on what sort of closures happen over the next few years
but if you are willing to hold out they look like they have the capacity to bounce back

Rating: Long Term Yield Buy

This column is the personal opinion of the writer and does not imply any stock recommendations or offer financial advice. Readers should do further research of their own or talk to their adviser before acting on themes in this article. All prices and analysis at the Date of publication at the top of the post

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