TSXV:MCS

Stock Analysis Report

McChip Resources

Executive Summary

McChip Resources Inc. operates in the natural resource industry in Canada.

Risk Analysis

Makes less than USD$1m in revenue (CA$-68K)

Does not have a meaningful market cap (CA$3M)

Currently unprofitable and not forecast to become profitable over the next 3 years

Dividend of 6% is not well covered by earnings



Snowflake Analysis

Excellent balance sheet unattractive dividend payer.

Share Price & News

How has McChip Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MCS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

MCS

0.4%

CA Oil and Gas

0.1%

CA Market


1 Year Return

-44.4%

MCS

6.5%

CA Oil and Gas

12.2%

CA Market

Return vs Industry: MCS underperformed the Canadian Oil and Gas industry which returned 6.5% over the past year.

Return vs Market: MCS underperformed the Canadian Market which returned 12.2% over the past year.


Shareholder returns

MCSIndustryMarket
7 Day-2.0%0.4%0.1%
30 Day-3.8%1.2%0.2%
90 Dayn/a1.1%0.4%
1 Year-42.6%-44.4%11.5%6.5%15.9%12.2%
3 Year17.7%0%-14.0%-22.9%16.0%5.4%
5 Year-48.8%-56.5%-10.1%-24.2%33.5%13.7%

Price Volatility Vs. Market

How volatile is McChip Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is McChip Resources undervalued compared to its fair value and its price relative to the market?

0.58x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: MCS (CA$0.5) is trading above our estimate of fair value (CA$0.36)

Significantly Below Fair Value: MCS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MCS is unprofitable, so we can't compare its PE Ratio to the Oil and Gas industry average.

PE vs Market: MCS is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MCS's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MCS is good value based on its PB Ratio (0.6x) compared to the CA Oil and Gas industry average (0.6x).


Next Steps

Future Growth

How is McChip Resources forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

-5.7%

Forecasted Energy industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as McChip Resources has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has McChip Resources performed over the past 5 years?

35.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCS is currently unprofitable.

Growing Profit Margin: MCS is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MCS is unprofitable, but has reduced losses over the past 5 years at a rate of 35.4% per year.

Accelerating Growth: Unable to compare MCS's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MCS is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (16.5%).


Return on Equity

High ROE: MCS has a negative Return on Equity (-8.34%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is McChip Resources's financial position?


Financial Position Analysis

Short Term Liabilities: MCS's short term assets (CA$4.8M) exceed its short term liabilities (CA$1.0M).

Long Term Liabilities: MCS has no long term liabilities.


Debt to Equity History and Analysis

Debt Level: MCS's debt to equity ratio (17.6%) is considered satisfactory.

Reducing Debt: MCS's debt to equity ratio has increased from 4.1% to 17.6% over the past 5 years.


Balance Sheet

Inventory Level: MCS has a low level of unsold assets or inventory.

Debt Coverage by Assets: MCS's debt is covered by short term assets (assets are 5.5x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: MCS has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: MCS has sufficient cash runway for more than 3 years if free cash flow continues to grow at historical rates of 12.3% each year


Next Steps

Dividend

What is McChip Resources's current dividend yield, its reliability and sustainability?

6.00%

Current Dividend Yield


Dividend Yield vs Market

company6.0%marketbottom25%2.0%markettop25%5.6%industryaverage4.7%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: MCS's dividend (6%) is higher than the bottom 25% of dividend payers in the Canadian market (2%).

High Dividend: MCS's dividend (6%) is in the top 25% of dividend payers in the Canadian market (5.65%)


Stability and Growth of Payments

Stable Dividend: MCS has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: MCS has only been paying a dividend for 9 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: MCS is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of McChip Resources's salary, the management and board of directors tenure and is there insider trading?

27.9yrs

Average board tenure


CEO

Richard McCloskey (68yo)

0yrs

Tenure

CA$139,860

Compensation

Mr. Richard D. McCloskey, Bo, B.Sc., MBA has been the President of Baffinland Iron Mines Limited since July 2002. Mr. McCloskey serves as the Chief Executive Officer and President of McChip Resources Inc.  ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD105.95K) is below average for companies of similar size in the Canadian market ($USD170.44K).

Compensation vs Earnings: Richard's compensation has been consistent with company performance over the past year.


Board Age and Tenure

27.9yrs

Average Tenure

68yo

Average Age

Experienced Board: MCS's board of directors are seasoned and experienced ( 27.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$1,30028 May 19
Matachewan Consolidated Mines, Limited
EntityCompany
Shares2,000
Max PriceCA$0.65
BuyCA$40,80013 May 19
Matachewan Consolidated Mines, Limited
EntityCompany
Shares48,000
Max PriceCA$0.85

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Richard McCloskey (68yo)

    CEO, President & Director

    • Tenure: 0yrs
    • Compensation: CA$139.86k
  • Edward Dumond

    CFO, Corporate Secretary & Director

    • Tenure: 28.9yrs
    • Compensation: CA$105.07k

Board Members

  • Gord McCreary (67yo)

    Independent Director

    • Tenure: 27.9yrs
  • Anthony Weldon

    Independent Director

    • Tenure: 23.9yrs
  • Richard McCloskey (68yo)

    CEO, President & Director

    • Tenure: 0yrs
    • Compensation: CA$139.86k
  • Edward Dumond

    CFO, Corporate Secretary & Director

    • Tenure: 28.9yrs
    • Compensation: CA$105.07k
  • A. Matthew (78yo)

    Independent Director

    • Tenure: 34.9yrs
  • Timothy Gould

    Independent Director

    • Tenure: 13.5yrs
  • Douglas Bolton

    Director

    • Tenure: 1.2yrs

Company Information

McChip Resources Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: McChip Resources Inc.
  • Ticker: MCS
  • Exchange: TSXV
  • Founded: 1935
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: CA$2.830m
  • Shares outstanding: 5.66m
  • Website: https://null

Location

  • McChip Resources Inc.
  • 150 York Street
  • Suite 410
  • Toronto
  • Ontario
  • M5H 3S5
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCSTSXV (TSX Venture Exchange)YesCommon SharesCACADJan 1981
MCCH.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 1981

Biography

McChip Resources Inc. operates in the natural resource industry in Canada. The company invests in petroleum interests in Western Canada, as well as direct and indirect interests in minerals. It holds inter ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/15 23:40
End of Day Share Price2019/12/10 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.