Q: I bought into MXG for the special dividend last month, but I am reluctant to sell it because it is in a sector I favor. High insider ownership and very few followers. The earnings look good and they are net cash. They don't state future growth plans or any real mission statement. Has 5i Research looked into this company?
Thanks, Terry
Thanks, Terry
5i Research Answer:
While it is not a name that we closely follow, it has come up on our radar a few times. Results have been strong in 2024 as the company's M2 facility which was previously offline came back online. It paid down some of its debt in October while it already had a strong balance sheet. We think it looks like a good small cap power producer which is also quite cheap at 7.2x trailing earnings. MXG has a few development opportunites in early stages that would contribute positively to futre growth, but are likely more long term considerations. In the short-term, continued operational strength and increased power prices would help performance. We think it looks solid but are mindful of liquidity and small cap risks.