Q: Is MRC undervalued and if patient can be held long term? Any chance of buyout and what is the net asset value. Thank you,
5i Research Answer:
Certainly at 5X earnings MRC can be considered cheap. Shares are very tightly held with 74% held by a connected group. The dividend is fairly low and shares have not done much, so it is not our favourite, as we do prefer more growth. But we would consider it OK. There is always a chance of a privatization but not something we would count on and would not buy just on that possibility. Net asset value requires lots of estimates and can be a moving target. The last comment from the company on a conference call indicated $340/share as NAV. Note this would be pre-tax.