re: Ann: Change of Director's Interest - ...
A fair question FB. I have a pretty unsophisticated answer, simply looking at multiples for telecommunications industry and applying that to MTU FY14 and FY15 forecasts - a multiple of 14 seems reasonable for a company with a track record of growth: that would imply $7.14 and $7.98.
CAGR (EPS) 27% and CAGR Div growth 11%. If we gave a MTU a discount rate of 14% (high debt) dividend growth would imply $8 plus.
Yes debt is high so that may discount the stock until it is paid down. Cash flow will need watching to ensure it can easily service the debt, it looks fine for now.
More importantly is the quality of management, a subjective call but given track record of growing shareholder's wealth and the successful integration of acquisitions over the past year I think they deserve much credit. Integration is a difficult job and the 1/2 yearly suggests they are doing fine in gaining synergies.
At the end of the day it is what the market determines it to be. I'm not an expert in these matters and get it wrong as often as I get it right. I would welcome different opinions they might help me avoid costly mistakes.
MTU Price at posting:
$6.30 Sentiment: LT Buy Disclosure: Held
