Value Microcaps Motherboard

[abh3vt]

MCX (MC Shipping) recently got analyst coverage from Cantor Fitzgerald.
New estimates out on Yahoo show a fairly undervalued LPG shipper:
http://finance.yahoo.com/q/ae?s=MCX

FY05: 1.35
FY06: 1.97
Rev growth: +20% y/y

The market usually gives out very low PEs for shippers/tankers due to the volatility in rates. Using a PE range of 7-9x earnings would put MCX next year at 13.79 - 17.73.

Currently trading at 9.50, so its current FY05 PE is at 7x expectations, which is probably the low end.

LPG shipping rates are much more stable than crude and other commodities. MCX uses longer term charters, so once rates are locked in they have pretty decent forward visibility into revenues and earnings. Next year, they will have 6 ships with expiring charters coming up for renewal at what should be significantly higher rates. As these ships come up for renewal at various points, the revenues and earnings should continue to grow sequentially throughout FY06 and into FY07.

The stock also pays a dividend with a present yield of 2.6%.

Won't be a huge 10 bagger, but should hopefully provide some stability in one's portfolio if the market continues to come under pressure.