NYSE:MDR
$25.17
(3/18 4:00PM)
-1.7%
| Open | $25.67 |
Mkt Cap | $5.8 Billion |
| High | $25.67 |
52Wk High | $27.89 |
| Low | $25.09 |
52Wk Low | $12.78 |
| Volume | 1.0 Million |
Avg Vol 10D | 1.9 Million |
Ockham's Rating/Recommendation Summary
Rating specific information requires Premium Access.
Buy Now
or
Learn More about Ockham's Features and Services.
MDR Revenue
As a value investing shop, we are interested in seeing how MDR's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 1.76x and the low end of the range at 0.53x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for MDR of 0.96x is well below its normal historic Price to Sales levels. At a price of $25.75, MDR is 17% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.
MDR Cash Earnings
Looking at MDR specifically in their Cash Earnings capabilities, Ockham views MDR as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for MDR, the current level of Cash Earnings compared to its historical levels helps identify where MDR is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 19.09 and a historical low Cash Earnings per share ratio of 5.73, an investor can relate where value becomes optimal.
So with MDR's current price (latest close of $25.75) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, MDR is 25% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with MDR.
MDR Dividends
While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company. MDR may pay a dividend at this time; however, there is an insufficient amount of history to incorporate it into our analysis. Therefore, we are not utilizing the dividends or lack thereof in our study. As MDR more consistent dividend history is made available, we will begin to factor this into the Ockham approach.
MDR's Back in the News After More than a Month on Squawk On The Street
There has not been much to report from MDR in the last few weeks at least, but Squawk On The Street talked about the stock recently.
McDermott International, Inc. receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; MDR has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… MCDERMOTT INTERNATIONAL, exhibit a, fourth quarter profit more than doubles, comes in way ahead of estimates. 42% versus 39%. …”
News on Earnings Per Share for MDR on Seeking Alpha Wall St Breakfast
Whenever a reliable source like Seeking Alpha Wall St Breakfast talks about earnings or news on earnings, we think it warrants bringing attention to it.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, MDR has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on MDR. But we have noted the recent price declines that make this stock more attractive to value minded investors. Please be aware that MDR is trading off $2.26 today, and is clearly being affected by the latest news. The Motley Fool CAPS data suggests that investors believe McDermott International, Inc. will beat the market in the foreseeable future.
“… (PR) MCDERMOTT INTERNATIONAL (MDR): Q4 EPS of $0. 43 beats by $0. 02. Revenue of $1. 46B (-12%) vs. $1. 53B. Shares -2. 6% AH. (PR) Nutrisystem (NTRI): Q4 EPS of $0. …”
McDermott International, Inc. Finally Getting Noticed by Media and Countdown to the Closing Bell
MDR has not been a media darling in the last six months, but they have started to pay attention as you can see by the story on Countdown to the Closing Bell.
The Ockham valuation currently has a Fairly Valued stance on MDR because it trades within the price range that we would expect given current market conditions and fundamentals. But as the price has risen in the last week, we have begun to look slightly less favorably on the valuation. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, McDermott International, Inc. has actually sunk a bit in comparison to the others. Take notice of the news on this stock because it is up $2.20 since the close of trading yesterday. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.
“… Number three MCDERMOTT INTERNATIONAL construction company separating power from offshore oil and gas to create two companies. Stocks up over 10%. . …”
McDermott International, Inc. (MDR) Discussed on CNBC's Fast Money
McDermott International, Inc. is in the news. Find out how this impacts MDR trading on Ockham Research.
But they're just barely that's why I think you've got to keep an eye on this sector. >> do you like any of these >> i'm been focused on fluor. >> I like mcdermott mcd -- mdr, excuse mep these guys are very involved in the ag trade as well on the engineering side. And they're relatively I think it's a name you can trust. >> i'm long ge, not just because i'm a team player or a kissup
“… ng side. And they're relatively I think it's a name you can trust. >> i'm long ge, not just because i'm a team player or a kissup …”
McDermott International, Inc. (MDR) Discussed on CNBC's Mad Money
McDermott International, Inc. is in the news. Find out how this impacts MDR trading on Ockham Research.
From akron, ohio. >> akron. Man, i've got everybody buying the first merit. >> welcome to ohio state. >> my dad was the one who introduced me to the show. So we had to ask you, what are the possibilities of mdr getting bought by another company? >> about mcdermott? >> you know, when mcdermott came -- they reconstituted, mcdermott, and I recommended the and I know the company is a very
“… mcdermott? >> you know, when mcdermott came -- they reconstituted, mcdermott, and I recommended the and I know the company is a very …”
McDermott International, Inc. (MDR) Discussed on CNBC's Fast Money
McDermott International, Inc. is in the news. Find out how this impacts MDR trading on Ockham Research.
@ . >>> let's get to the final >> amgen. Mdr, mcdermott. I'm melissa lee, tune in tomorrow at 5:00 p.M. And midnight for more fast money on cnbc. So you back here tomorrow! >> the next couple of dares very interesting for the market and
“… @ . >>> let's get to the final >> amgen. Mdr, mcdermott. I'm melissa lee, tune in tomorrow at 5:00 p.M. And midnight for more fast money on cnbc. So you back here tomorrow! >> the next couple of dares very interesting for the market and …”
McDermott International, Inc. (MDR) Discussed on CNBC's Fast Money
McDermott International, Inc. is in the news. Find out how this impacts MDR trading on Ockham Research.
This stock at 580. But over the summer around 60 yes it's trading 12 there. We talked about friday it was 10 but agree with pete. Mdr I think sets up nicely as >> next trade here, battle the bears the gold trade back on. Dropped 10% in the last month. The safe haven peeked 2% today. Closing above the $900 level.
“… safe haven peeked 2% today. Closing above the $900 level. …”