Entered MultiClient Geophysical (MCG)

MultiClient Geophysical is a small cap Norwegian company that holds a library of survey data. The data is used for resource exploration. With the downturn in oil price the business seems frozen.

On the plus side the company has a strong balance sheet and low burn rate. The company is trading close to net-cash. Entered at P/NCAV 0.57.

 

7 thoughts on “Entered MultiClient Geophysical (MCG)”

      1. I assume the stock will be stuck in the freezer until oil prices increase. I don’t have any strong opinion on the commodity prices, but given the cash position the company should be able to weather some though times. As part of an diversified portfolio it seems reasonable to have a small position.

  1. Hey there! MCG seems to have lost a lot of NCAV since you posted. Whats your current view on this company? Thanks, Pascal

    1. Yes, according to Q2 report MCG is no longer a net-net stock. The company is in no immediate danger, as opex has reduced inline with revenue. Margin of safety has decreased, a lot of cash has been invested in new data assets. As retained earnings now is negative this move can be questioned. I’ll evaluate the stock in a couple of months, when I’ve had it for one year. At the moment it looks like I’ll drop it, but they have one or two more reports to file before I’ll make the call.

      I usually need something more to eject from a stock early, eg doubts about the quality of accounting.

      1. Thanks for your response, I will have to remove it from net-net basket till the end of the quarter.

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