Post by
Angles on Mar 04, 2022 1:40pm
Actually, MCB is still a great investment!
Actually, MCB is still a great investment in my opinion.
Let's review the facts and the projections as I see them.
McCoy Global is a leader in a special niche industry with a small tightly held float and a great management team.
They just reported 2021 annual earnings of $0.15 per share for a PE of just 5.5. (Yes, mixed up by subsidies against large R & D expenditures and other one time costs but their margins improved handily and will continue to do so)
I project annual earnings of $0.22 per share in 2022 for a PE of only 3.7 based upon the low current share price.
Their sales were $38.7 million in 2020.
The sales dropped to only $32.8 million in 2021, a decrease of 15%
However, I am confident that MCB’s sales will improve substantially in 2022 to $46.0 million, which would be a 40% increase.
And I see their sales rising to 100.0+ million by 2024 with 40% gross margins. They have stated this figure in their previous investor presentations.
Their Q4 order backlog in 2020 was $9.7 million. In Q4 2021 it increased to $11.7 million or a 17% gain. I am projecting an average 2022 per quarter order backlog of $12.8 million. Again, I am very confident in this figure as a minimum base.
I further project that their book to build ratio will improve to over 100 and stay there in the following years to come.
MCB’s management knows this industry good and have done a great job managing the business as far as controlling costs, dealing with sales/orders/product development/sourcing within this C-19 and limited supply environment. Things will only get better in the future in these areas.
Soon, the tremendous R & D costs will slow down, and their sales will increase with all the new smart product order percentage increases. This will increase cash flow and profits a lot and should have a dramatic upward impact on the share price.
They currently have over $12.0 million in cash which is $0.235 per share. Plus, an unused $2.5 credit facility. They have further confirmed to me personally, they have enough cash and financing to complete and produce all the smart product line whether or not they make a deal from the strategic initiatives committee.
The present book value is $1.42 per share and does not include many expenditures, equipment and inventory that have been written off previously, making the real value of the company much higher. When you add in my projected earnings for 2022 the book value rises to $1.64. This is double the current share price.
If a partner deal or buy out was made, it should be for at least this amount. This would represent over a 100% gain for anyone entering a purchase at this level. I am buying more shares currently, but I have my buying amount limits.
With a great future already outlined for 2022 and the completion of all smart products by 2023 I see buying more shares of MCB as a great investment in my opinion. I wish I had more money and lots of it. I would not only buy more shares in addition to my already large position in MCB, but I would buy the entire company, if I could.
Good luck to the many long term shareholders and any new ones. Holding MCB shares just takes a lot of patience but I am positive it will pay off in the long run.
Angles