Mattr has leveraged a major asset sale to strengthen its financial position

Mattr sold most of its pipeline coating business to pay down its long-term debt of $173.6 million while also making a $150 million investment to modernize and expand its manufacturing facilities for plastic tanks and other products.

Despite the projected fall in earnings per share, the company remains an attractive investment for aggressive investors.

Meanwhile the stock trades at 16.1 times the company’s 2024 earnings forecast.

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MATTR CORP. (Toronto symbol MATR) remains a buy for highly aggressive investors.

Formerly called ShawCor Ltd. (old symbol SCL), the company recently sold most of its pipeline coating business to Tenaris S.A. (New York symbol TS) for $225 million. To put that amount in context, the company’s market cap (the total value of all outstanding shares) is $1.06 billion.

The remaining firm makes plastic tanks and industrial products such as electrical cables and sheaths.

The company will probably use the proceeds from the sale of the pipeline coating business to pay down its long-term debt of $173.6 million (as of September 30, 2023). That’s equal to 16% of its market cap. It also ended the quarter with cash of$98.0 million.

Growth Stocks: Mattr’s annual revenue should double in the years to come

Due to those asset sales, Mattr’s projected earnings will probably fall from $2.01 a share in 2023 to $0.97 a share in 2024. The stock trades at a reasonable 16.1 times that 2024 forecast.

Moreover, the company plans to invest $150 million to modernize and expand its manufacturing facilities. It expects these improvements will help it meet its goal of doubling its annual revenue by 2030 (excluding acquisitions).

Recommendation in The Successful Investor: Mattr Corp. (formerly ShawCor Ltd.) is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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