Mattr sold most of its pipeline coating business to pay down its long-term debt of $173.6 million while also making a $150 million investment to modernize and expand its manufacturing facilities for plastic tanks and other products.
Despite the projected fall in earnings per share, the company remains an attractive investment for aggressive investors.
Meanwhile the stock trades at 16.1 times the company’s 2024 earnings forecast.
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MATTR CORP. (Toronto symbol MATR) remains a buy for highly aggressive investors.
Formerly called ShawCor Ltd. (old symbol SCL), the company recently sold most of its pipeline coating business to Tenaris S.A. (New York symbol TS) for $225 million. To put that amount in context, the company’s market cap (the total value of all outstanding shares) is $1.06 billion.
The remaining firm makes plastic tanks and industrial products such as electrical cables and sheaths.
The company will probably use the proceeds from the sale of the pipeline coating business to pay down its long-term debt of $173.6 million (as of September 30, 2023). That’s equal to 16% of its market cap. It also ended the quarter with cash of$98.0 million.
Growth Stocks: Mattr’s annual revenue should double in the years to come
Due to those asset sales, Mattr’s projected earnings will probably fall from $2.01 a share in 2023 to $0.97 a share in 2024. The stock trades at a reasonable 16.1 times that 2024 forecast.
Moreover, the company plans to invest $150 million to modernize and expand its manufacturing facilities. It expects these improvements will help it meet its goal of doubling its annual revenue by 2030 (excluding acquisitions).
When we publish a newsletter, Hotline, Advice for Inner Circle Members email, and so on, we give a recommendation. If it’s a buy recommendation, the price we give on publication is our entry price.
Granted, prices may fluctuate in the time after publication—but unless the price moves significantly after publication, it’s still a valid entry point. Note that if the current price differs significantly from the recommended price, then we would aim to update our advice to let you know if our buy advice still applies.
Meanwhile, at the same time, we don’t publish price targets for our recommendations.
Pat doesn’t publish targets for several reasons. One is that they draw too much attention to the least reliable part of the investment decision-making process. They also spur investors to sell their best picks way too early. As Pat says, by definition, after all, your best picks are those that did way better than you ever expected.
Targets tend to push up your trading activity and commission expense, because they give you a rationale for selling whenever a stock you own hits its target. This helps explain the popularity of targets in brokerage research.
However, if we do feel a stock is a sell, we will let you know in the newsletter or Hotline.
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Why are there no price models for the recommendations? It’s very hard to determine an entry or exit point for the stocks.
Thanks for your question.
When we publish a newsletter, Hotline, Advice for Inner Circle Members email, and so on, we give a recommendation. If it’s a buy recommendation, the price we give on publication is our entry price.
Granted, prices may fluctuate in the time after publication—but unless the price moves significantly after publication, it’s still a valid entry point. Note that if the current price differs significantly from the recommended price, then we would aim to update our advice to let you know if our buy advice still applies.
Meanwhile, at the same time, we don’t publish price targets for our recommendations.
Pat doesn’t publish targets for several reasons. One is that they draw too much attention to the least reliable part of the investment decision-making process. They also spur investors to sell their best picks way too early. As Pat says, by definition, after all, your best picks are those that did way better than you ever expected.
Targets tend to push up your trading activity and commission expense, because they give you a rationale for selling whenever a stock you own hits its target. This helps explain the popularity of targets in brokerage research.
However, if we do feel a stock is a sell, we will let you know in the newsletter or Hotline.