BENCHMARKS
Not sure who to benchmark in Australia and used CBRE, Jones Lang, Marcus Millichop and Colliers in USA.
PROFITABILITY
McGrath EBIT margins very good at 18% and compares with USA companies in range 5 to 15%.
McGrath very good and wonder if forecast EBIT not a little optimistic.
ASSET MANAGEMENT
Return On Assets for McGrath amazing at 74% and compares with USA benchmarks in range 11 to 37%.
PRICING
McGrath much smaller than USA benchmarks so some discount should be applied ?
If you factor in a discount for size then McGrath could be worth $2.60 maximum.
However, playing in an industry where benchmarks all very expensive and so is McGrath in an absolute sense. Relative to USA industry McGrath pricing not too bad.
CONCLUSION
If market sentiment holds then probably a stag in McGrath, particularly at low end of the range.
QUESTIONS PLEASE
1. WHO WOULD YOU BENCHMARK AGAINST IN AUSTRALIA ?
2. IS ANYONE GOING INTO THIS IPO ?
