Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Magellan Aerospace Corp (MAL) New Listing -- Ignore unavailable to you. Want to Upgrade?

To: peter dumbrille who wrote (453)	12/6/1998 9:25:00 PM
From: Serge Collins	Read Replies (1) \| Respond to of 633

This company has come a long way since 1994/1995 when there were lots of doubt about the future of the company, but I'm not sure I share everyone's upbeat assessment of the near term future of Magellan. The company is very dependant an Boeing and one need only look at the recent contract awards to realize this. The argument that Boeing will look to outsource more in view of recent developments is a bit spurious. Boeing's problems are related to the top line, not the bottom line. Sales are expected to decline and outsourcing isn't going to do anything to erase that fact. Many of the projects that are expected to be impacted are the very ones that Magellan has been receiving work for. The other thing investors tend to overlook is the fact that Magellan is not presently taxable, so their bottom line results tend to be inflated. For the first nine months of the year, they had net earnings of $22 million but paid only $520 thousand in taxes. Their true net earnings, if taxed at the usual rate, would have been roughly $12.6 million or about $0.21 per share for the first nine months. At $6.90 a share, I don't think the stock is undervalued considering the important fundamental change taking place in the aerospace industry at the present time.