re: Ann: CLO: Sale of Shareholding in Forge G... Axiomax ... the...

re: Ann: CLO: Sale of Shareholding in Forge G... Axiomax ... the MND / FGE comparison is an interesting one when looking at company histories.

Over, say, the past 6 years MND has traded on a PE of >10 basically almost always. FGE has been over PE 10 at times, however that has not been the norm. The difference stands out more when looking at how their PE's compare relative to the market (ie. FGE always under. MND typically above).

Both companies have solid balance sheets and always have.

One big difference is that MND has maintained a high dividend payout ratio, with FGE's much lower. Because of this, despite the MND premium PE rating MND still offers a higher dividend yield to MND.

I guess related to payout ratio is the MND return on equity is almost twice that of FGE. This is heavily influenced by the scale of cash that FGE holds, however FGE must presumably be expecting to employ it more productively in the medium term future.

Overall, at face value there is very little reason why FGE would be consistently rated so much lower when from a business, cash flow, balance sheet, and growth perspective it's hard to find a box that is not positive.

The above is looking back. When looking forward:

* MND about $1 billion of new contracts YTD. So with half year revenue of almost $1.3B their order book has actually fallen. FGE about $600 million of new contracts and $500M of revenue. So book has grown.
* MND provided a conservative outlook - maybe playing it safe, time will tell. FGE is talking about growth and options.

Again, although a brief and in ways superficial comparison, finding it hard to see why FGE would be rated as much below MND as they are.

When looking at FGE on its own am happy with my investment. When comparing it to MND makes me think of buying more on down days like today.

MJS