Q: Outlook for Mda for 2 to 3 year hold,financial metrics and recommended entry price? Thanx.
5i Research Answer:
MDA is not cheap at 37X earnings. But it has nice contract, a competitive edge (barriers to entry), a strong balance sheet and solid growth. EPS should rise at least 33% next year and it has leverage to further contracts. Debt is barely six months' cash flow. Free cash flow was $258M in the last 12 months. The last quarter was very strong and well ahead of estimates. We think $27 would be a good price.