Master Drilling Group (JSE:MDI) - Share price, News & Analysis

MDI fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	1/6
Financial Health	6/6
Dividends	0/6

MDI Stock Overview

Rewards

Trading at 62.4% below our estimate of its fair value

Risk Analysis

Earnings have declined by 20.5% per year over past 5 years

Profit margins (5.6%) are lower than last year (8.7%)

Significant insider selling over the past 3 months

Price History & Performance

Summary of all time highs, changes and price drops for Master Drilling Group
Historical stock prices
Current Share Price	R12.00
52 Week High	R13.60
52 Week Low	R6.51
Beta	0.69
1 Month Change	13.21%
3 Month Change	-8.47%
1 Year Change	83.21%
3 Year Change	22.45%
5 Year Change	-29.41%
Change since IPO	33.33%

Recent News & Updates

Sep 07

Master Drilling Group (JSE:MDI) Takes On Some Risk With Its Use Of Debt

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	MDI	ZA Metals and Mining	ZA Market
7D	2.0%	2.6%	-0.3%
1Y	83.2%	3.4%	13.9%

Return vs Industry: MDI exceeded the ZA Metals and Mining industry which returned 3.4% over the past year.

Return vs Market: MDI exceeded the ZA Market which returned 13.9% over the past year.

Price Volatility

Is MDI's price volatile compared to industry and market?
MDI volatility
MDI Average Weekly Movement	5.0%
Metals and Mining Industry Average Movement	7.0%
Market Average Movement	5.7%
10% most volatile stocks in ZA Market	12.1%
10% least volatile stocks in ZA Market	3.3%

Stable Share Price: MDI is not significantly more volatile than the rest of ZA stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MDI's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1986	n/a	Danie Pretorius	https://www.masterdrilling.com

Master Drilling Group Limited, an investment holding company, provides specialized drilling services to blue chip major and mid-tier companies in the mining, civil engineering, construction, and hydro-electric power sectors. The company offers rock boring services, including raise, horizontal, box hole, slot, reef, mobile tunnel, and blind shaft boring system; aircore, blast hole, core, grade control, hydrogeological, mud rotary, percussion, sonic, and underground drilling services; and support services, which include directional drilling, stage shaft and remote-operated shaft support, piling, and geo intelligence services. It operates in Africa, Central and North America, South America, and internationally.

Master Drilling Group Fundamentals Summary

How do Master Drilling Group's earnings and revenue compare to its market cap?
MDI fundamental statistics
Market Cap	US$115.41m
Earnings (TTM)	US$7.67m
Revenue (TTM)	US$137.74m

15.7x

P/E Ratio

0.9x

P/S Ratio

Is MDI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MDI income statement (TTM)
Revenue	US$137.74m
Cost of Revenue	US$105.13m
Gross Profit	US$32.61m
Expenses	US$24.94m
Earnings	US$7.67m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Mar 22, 2022

Earnings per share (EPS)	0.051
Gross Margin	23.67%
Net Profit Margin	5.57%
Debt/Equity Ratio	22.0%

How did MDI perform over the long term?

See historical performance and comparison

Valuation

Is Master Drilling Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: MDI (ZAR11.5) is trading below our estimate of fair value (ZAR30.57)

Significantly Below Fair Value: MDI is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: MDI is poor value based on its PE Ratio (15.1x) compared to the ZA Metals and Mining industry average (6x).

PE vs Market: MDI is poor value based on its PE Ratio (15.1x) compared to the ZA market (10.9x).

Price to Earnings Growth Ratio

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

Price to Book Ratio

PB vs Industry: MDI is good value based on its PB Ratio (0.7x) compared to the ZA Metals and Mining industry average (1.3x).

Future Growth

How is Master Drilling Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

-11.6%

Forecasted Materials 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 Master Drilling Group 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.

Past Performance

How has Master Drilling Group performed over the past 5 years?

-20.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MDI has high quality earnings.

Growing Profit Margin: MDI's current net profit margins (5.6%) are lower than last year (8.7%).

Past Earnings Growth Analysis

Earnings Trend: MDI's earnings have declined by 20.5% per year over the past 5 years.

Accelerating Growth: MDI's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MDI had negative earnings growth (-35.2%) over the past year, making it difficult to compare to the Metals and Mining industry average (218.4%).

Return on Equity

High ROE: MDI's Return on Equity (4.5%) is considered low.

Financial Health

How is Master Drilling Group's financial position?

Financial Position Analysis

Short Term Liabilities: MDI's short term assets ($94.1M) exceed its short term liabilities ($68.8M).

Long Term Liabilities: MDI's short term assets ($94.1M) exceed its long term liabilities ($19.5M).

Debt to Equity History and Analysis

Debt Level: MDI's net debt to equity ratio (9%) is considered satisfactory.

Reducing Debt: MDI's debt to equity ratio has reduced from 23.9% to 22% over the past 5 years.

Debt Coverage: MDI's debt is well covered by operating cash flow (68%).

Interest Coverage: MDI's interest payments on its debt are well covered by EBIT (7.6x coverage).

Balance Sheet

Dividend

What is Master Drilling Group current dividend yield, its reliability and sustainability?

Dividend Yield vs Market

Notable Dividend: Unable to evaluate MDI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate MDI's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if MDI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MDI's dividend payments have been increasing.

Current Payout to Shareholders

Dividend Coverage: MDI is not paying a notable dividend for the ZA market.

Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of MDI's dividend in 3 years as they are not forecast to pay a notable one for the ZA market.

Next Steps

Explore strong dividend paying companies in the Materials industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

13.0yrs

Average management tenure

CEO

Danie Pretorius (63 yo)

36yrs

Tenure

US$320,309

Compensation

Mr. Daniel Coenraad Pretorius, also known as Danie founded Master Drilling Group Limited in 1986 and has been its Chief Executive Officer since July 17, 2012. Mr. Pretorius founded Master Drilling in 1986...

CEO Compensation Analysis

Compensation vs Market: Danie's total compensation ($USD320.31K) is about average for companies of similar size in the ZA market ($USD258.93K).

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

Leadership Team

Experienced Management: MDI's management team is seasoned and experienced (13 years average tenure).

Board Members

Experienced Board: MDI's board of directors are considered experienced (8.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: MDI insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/01/24 17:00
End of Day Share Price	2022/01/24 00:00
Earnings	2021/06/30
Annual Earnings	2020/12/31