Monday, May 22, 2017

MRCR at 5x Earnings

This is your annual reminder of how cheap Moro (MRCR) is.  I got the latest report a few days ago and MRCR is currently trading at the following ratios:
  • P/E = 4.9
  • P/BV = 0.52
  • P/S = 0.07
  • P/E cont ops = 4.3

For the back story see my old posts:
All you need to know about Moro are the stats.  Look at the balance sheet and income statement and it's cheap.  The CEO is about 80 now has to do something someday.  The company is a collection of construction related businesses that could be sold off one piece at a time or all together.  MRCR is dark and will send reports if you ask.  A year ago the CEO told me he'd be filing reports publicly again "soon" and I'm still waiting. 

So you know the earnings are not a fluke here are some highlights from the past 5 years.  As far as continued operations go, the company started classifying the Rado (HVAC) operations as discontinued starting in Dec 2013.  


BV per share avg over the past 5 years is $7.7M = $1.21 per share.  EPS avg from continued operations over the past 5 years is $0.07.  If 2014 was an anomaly then avg cont ops EPS would be more like $0.10.  

We have a construction business in the dark so they will never fetch a big multiple.  The CEO hasn't taken a salary in years so earnings should be a bit lower.  I don't know what other cost saving measures they have in place.  

I think it's worth more than $0.61.

--Dan
disclosure: long MRCR

8 comments:

  1. $60M in revenue and <$1M in earnings.

    That is some horrific margins.

    What makes up the book value?

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    1. Yes super low margins. All the more reason for someone to buy them out and improve things. It's a construction company so I'm not sure what margins are to be expected

      BV is mostly accounts receivable, inventory, cash. $21.6M current assets, $24.8M total assets, $14.5M current liabilities, $17.2M total liabilities. $1.4M of that is goodwill. Liabilities are debt and accounts payable.

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  2. Dan,
    Thanks a lot for writing about this one.
    I think it's very very likely to be cheap, and I've owned it since I first read about it here.
    You have a wonderful blog.

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    Replies
    1. You are welcome and thank you for the compliment. I'm glad you like the blog.

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    2. MRCR is definitely cheap. I wish the company would publish reports publicly so the world could find out how cheap it is. Some day...

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    3. Based upon 2013 data, I get a NCAV of around $1.20. Does anyone have any updated figures?

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    4. The company website has contact info. Email them and they will send you updated reports. They produce quarterly and annual financials.

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