MPG - Metro Glass

[winner69]

Modest increase in profits coupled with PE expansion should see us doubling our money in the next 2 years.

Was keen to top up a month ago when sp dipped back towards 82 cents but unfortunately it never got there.

Yep, that’s how I see it.

Metro wasn’t ever really a basket case - just that punters had unrealistic expectations (or were sucked in to expecting too much) and suffered as a consequence.

Buying around 82 cents was a good move (even lower for some)

[hardt]

Modest increase in profits coupled with PE expansion should see us doubling our money in the next 2 years.

Was keen to top up a month ago when sp dipped back towards 82 cents but unfortunately it never got there.

Could I ask why you despise TGH for a flashy IPO and lofty forecasts but MPG has your support after a very similar, if not worse example?

And what kind of performance would warrant a PE over 13 for a cyclical, or are we expecting them to double profits from here in order to get that double bagger?

[Balance]

Could I ask why you despise TGH for a flashy IPO and lofty forecasts but MPG has your support after a very similar, if not worse example?

And what kind of performance would warrant a PE over 13 for a cyclical, or are we expecting them to double profits from here in order to get that double bagger?

For starters, MPG is trading on a PER of 9.5 times ($174m market cap at 94c vs $18.4m NPAT - $16.3m add back $2.1m severance for CEO).

If you take out the 3.8c dividend sitting in there (ex 6 July), the PER is actually 9.1 times.

I am expecting MPG to increase NPAT by a modest 10% in F19 & F20. Market will get comfortable with the performance of MPG and mark the PER up - expect 11.5X in F19 and 13.5X in F20.

That's how I am expecting the sp to double.

TGH has failed to deliver every single year since its listing. MPG delivered in the latest results - that makes a big difference to perception.

[JCM]

Could I ask why you despise TGH for a flashy IPO and lofty forecasts but MPG has your support after a very similar, if not worse example?

And what kind of performance would warrant a PE over 13 for a cyclical, or are we expecting them to double profits from here in order to get that double bagger?

If you were fortunate enough to buy in at 70c you'd only require a PE of just over 14 to see a 100% return in two years (based upon past earnings and dividends). That's not accounting for any potential increase in profit from MPG's efficiency drives, Australian expansion, and absence of previous one off costs already absorbed. So not totally far fetched.

Even a PE of 13 as you've suggested would see the share price a good 20% higher than it's present day value (without taking dividends into consideration).

I have to agree with previous comments. Whilst this share is clearly not the growth story sold to investors at IPO, it remains a profitable business which appears undervalued using most metrics. I appreciate that some investors have been burned and will want to steer clear in future, but for those looking at it now it does look like a good opportunity both from a FA and TA perspective.

Two bagger in two years might be optimistic but it still looks like a good opportunity to me.

Disc. Holding, and looking forward to the upcoming SP increases and dividends.

[Balance]

If you were fortunate enough to buy in at 70c you'd only require a PE of just over 14 to see a 100% return in two years (based upon past earnings and dividends). That's not accounting for any potential increase in profit from MPG's efficiency drives, Australian expansion, and absence of previous one off costs already absorbed. So not totally far fetched.

Even a PE of 13 as you've suggested would see the share price a good 20% higher than it's present day value (without taking dividends into consideration).

I have to agree with previous comments. Whilst this share is clearly not the growth story sold to investors at IPO, it remains a profitable business which appears undervalued using most metrics. I appreciate that some investors have been burned and will want to steer clear in future, but for those looking at it now it does look like a good opportunity both from a FA and TA perspective.

Two bagger in two years might be optimistic but it still looks like a good opportunity to me.

Disc. Holding, and looking forward to the upcoming SP increases and dividends.

Not that many stocks in the NZ market trading on PER of less than 10.

Sure the building construction sector has not done well during the boom - but mostly because of foolish pursuit of market share. Focus back on margins and profits will lift profitability for most of the players.

[Balance]

Decent volumes going through - another 1m crossed this morning.

Excellent base being laid as the loose stock goes into longer term stronger holding hands.

[JCM]

Decent volumes going through - another 1m crossed this morning.

Excellent base being laid as the loose stock goes into longer term stronger holding hands.

Yeah, been decent volume for the last 3 days. Might see some disclosure notices coming through soon. Be interesting to see who's buying in / selling out.

[Balance]

Yeah, been decent volume for the last 3 days. Might see some disclosure notices coming through soon. Be interesting to see who's buying in / selling out.

Gross dividend yield (fully imputed) of 11% & PER of less than 10.

Hard for any fund looking for yield to resist.

[hardt]

For starters, MPG is trading on a PER of 9.5 times ($174m market cap at 94c vs $18.4m NPAT - $16.3m add back $2.1m severance for CEO).

If you take out the 3.8c dividend sitting in there (ex 6 July), the PER is actually 9.1 times.

I am expecting MPG to increase NPAT by a modest 10% in F19 & F20. Market will get comfortable with the performance of MPG and mark the PER up - expect 11.5X in F19 and 13.5X in F20.

That's how I am expecting the sp to double.

TGH has failed to deliver every single year since its listing. MPG delivered in the latest results - that makes a big difference to perception.

Just curious, fair points though and I agree that there is plenty of value left in MPG moving forward.

Both TGH and MPG delivered on revised guidance's/warnings which is not saying too much.
TGH FY17 revised guidance was met with the SP reacting very kindly +30-40% and MPG post profit warning this latest report was met +20%.

MPG barely delivered on their latest guidance following the warning in April, with 18.4m adjusted NPAT.
They hiked prices and had a few manufacturing issues which seems to be a recurring theme.

1. Market announcement in relation to the half year results, including financial guidance that the Group’s net profit after tax for the 12 months to 31 March 2018 is likely to be in the range of $18.5 million ‐ $20.0 million

Once they prove any sort of profit growth delivery there will be plenty of upside, if not that dividend will help with the downside.
Very tempted back in march to get in was talked out of it and put more into what I already know - SML

I have bought into a recovering MPG before and sold out on FY17 results.

[Balance]

Just curious, fair points though and I agree that there is plenty of value left in MPG moving forward.

Both TGH and MPG delivered on revised guidance's/warnings which is not saying too much.
TGH FY17 revised guidance was met with the SP reacting very kindly +30-40% and MPG post profit warning this latest report was met +20%.

MPG barely delivered on their latest guidance following the warning in April, with 18.4m adjusted NPAT.
They hiked prices and had a few manufacturing issues which seems to be a recurring theme.

1. Market announcement in relation to the half year results, including financial guidance that the Group’s net profit after tax for the 12 months to 31 March 2018 is likely to be in the range of $18.5 million ‐ $20.0 million

Once they prove any sort of profit growth delivery there will be plenty of upside, if not that dividend will help with the downside.
Very tempted back in march to get in was talked out of it and put more into what I already know - SML

I have bought into a recovering MPG before and sold out on FY17 results.

Stick with what we know and are comfortable with, Hardt.

I do have a glazier contact who supplies me with industry trends and information. That helps my comfort level.