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MGEE

Peter Lynch Guru Analysis for MGE Energy Inc.

$56.211
*  
0.309
  negative  
0.55%
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*Delayed - data as of May 22, 2013 13:48 ET 
Exchange: NASDAQ
Industry: Energy
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Assessments & Analysis Based on May 21, 2013 close price: $56.52

  for the P/E/Growth Investor based on the criteria of Peter Lynch. Return to MGEE Guru Analysis

All Star Guru Scorecard

Source Go Chart %
Peter Lynch 0%
Benjamin Graham 57%
Validea 61%
Motley Fool 29%
David Dreman 36%
Martin Zweig 62%
Kenneth Fisher 38%
James P. O'Shaughnessy 25%

   

Detailed Analysis

Guru Score: 0%

Determine the Classification:

According to this methodology, MGEE is a "Slow Grower", based on its single digit earnings growth of 5.4166%, Based on the average of the 3, 4 and 5 year historical EPS growth rates.


SALES: [FAIL]

MGEE would fall into the "Dividend Payers" category according to this methodology. The first requirement of a Slow Grower is that its sales exceed one billion. MGEE's sales are $559 million. It fails the test.


Inventory To Sales: [PASS]

When inventories increase faster than sales, it is a red flag. However an increase of up to 5% is considered bearable if all other ratios appear attractive. Inventory to sales for MGEE was 7.28% last year, while for this year it is 7.08%. Since inventory to sales has decreased from last year by -.2%, MGEE passes this test.


YIELD COMPARED TO THE S&P 500: [FAIL]

This methodology also maintains that the Yield of a "Slow Grower" should be high, which includes being higher than the S&P average (currently 2.22%). The yield for MGEE is not available, which means this criterion cannot be analyzed.


YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: [FAIL]

This methodology would consider the Yield-adjusted P/E/G ratio for MGEE of 2.24, Based on the average of the 3, 4 and 5 year historical EPS growth rates, to be unacceptable. This criteria is the most important one in the methodology and a failure of it will automatically result in a 0% score for the overall analysis.


Total Debt/Equity Ratio: [PASS]

This methodology would consider the Debt/Equity ratio for MGEE (62.63%) to be mediocre. If the Debt/Equity ratio is this high, the other ratios and financial statistics for MGEE should be good enough to compensate.


FREE CASH FLOW: [NEUTRAL]

The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for MGEE (.88%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.


NET CASH POSITION: [NEUTRAL]

Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for MGEE (3.6%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.
 
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