Welcome to the first in an occasional series on Hotcopper of super-premium yet simple stock calls from Geraldine - a 47yo mother of three whose been sniffing out great opportunities for 25 years.
I've had an eye on MAQ for some time, but I reckon that this morning's IPO of NextDC (ASX: NXT) tells the story.
NextDC is a startup operation that's yet to earn a dollar of revenue in the Data Centre industry. And while it's a couple of years until the thing makes a dollar of EBITDA, at current market prices it's being valued at double its $60 million cash backing. That's after coming on at a whopping 50 per cent premium to the ipo issue price.
Based on current fundamentals, NextDC is currently trading on 10x 2014 EBITDA - that's using RBS Morgans forecasts for $12.6 million in EBITDA in 2014.
That's about the same as the big international comparables with proven track records for rapid growth, and current year profitability.
However, while the market's paying up for NextDC, it's been a bit slower to recognise the value in MAQ - which makes more than half of its revenue from hosting. . . .which is growing revenue at better than 30 per cent per annum. . . . exactly the same business that NXT is targeting.
The best brokers in the market reckon that MAQ is going to to do about $23 million EBITDA in hosting this year. Apply a 10 times multiple to that and you get almost $14 per MAQ share. And that's before considering the cash balance (yes, cash . . . and no debt) and solid profits from the telco reselling business as well.
Now - MAQ hasn't been flavour of the month since the dot-com days. It had a near death experience in the crash, back when I could still squeeze into a mini-skirt, and the Tudehope boys. . .. who own 60 per cent. . . . .have taken a while to get their credibility back.
However, investors have started buying the story this year. Just look at the chart.
The message from Geraldine is . . . . it ain't over yet. Geraldine says the train's only just leaving the station. With more institutional interest focusing on the data centre industry in light of NextDC beating the drum. . . .you could see MAQ at $15 within 12 months.
Gotta go and do the school run. . . .
Geraldine
MAQ Price at posting:
$8.64 Sentiment: Buy Disclosure: Held
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