Mediagrif is undervalued, says Laurentian

Mediagrif’s (Mediagrif Stock Quote, Chart, News: TSX:MDF) Q2 is more evidence that the company is an attractive and safe play, says Laurentian Bank Securities analyst Nick Agostino.

On Tuesday, Mediagrif reported its Q2, 2016 results. The company earned $5.08-million on revenue of $18-million, a topline that was up 3% over the same period last year. The company said a weaker Canadian dollar had a positive impact of $800,000 on the quarter. Approximately 39% of the company’s revenue comes from outside Canada, most of it from the United States.

The company also announced the expansion of its share buyback, from 500,000 to 750,000 shares, and the continuation of its quarterly dividend of $0.10 a share.

Agostino says Mediagrif’s second quarter was in-line with his expectations on the top and bottom line. The analyst says the company’s LesPac and Jobboom offerings have disappointed for three quarters, but notes that it is working on some value added tech solutions for them. Overall, Agostino says he thinks Mediagrif’s current valuation is compelling.

“Considering MDF’s 2.4% dividend yield, 8.1% FCF yield (based on Q2/F16 annualized), very strong margins and its diverse top line exposure, we believe current levels represent an attractive entry point for a defensive play,” says Agostino.

In a research update to clients Wednesday, Agostino maintained his “Buy” rating and $21.00 one-year target price on Mediagrif, implying a return of 30.2 per cent at the time of publication.

Founded in 1996, Longueuil, Quebec-based Mediagrif offers a range of e-commerce services through B2B platforms such as The Broker Forum, Power Source Online, and Carrus Technologies.