Badger Daylighting Ltd is a powerful growth stock
24.03.2015 • About Badger Daylighting Ltd (
$BAD) • By InTwits
Badger Daylighting Ltd is a growth stock in Industrial industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Badger Daylighting Ltd showed growth in the last financial year. The company's revenue surged on 30.1% in FY2014. At the same time the company well managed its profitability and showed even faster growth in EBITDA of 39.9% for the same period.
In the longer period Badger Daylighting Ltd showed fast revenue growth of 29.6% from 2011 to 2014 annually. EBITDA surged on 30.6% from 2011 to 2014 annually.
Badger Daylighting Ltd ($BAD) financials for the last 5 years
| mln. CAD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 140 | 194 | 239 | 325 | 422 |
|---|
| Revenue growth, % | | 39.1% | 23.2% | 35.7% | 30.1% |
|---|
| Gross margin, % | 33.8% | 33.4% | 31.6% | 33.9% | 31.2% |
|---|
| SG&A, % | 9.00% | 6.17% | 5.88% | 7.92% | 2.74% |
|---|
| EBITDA | 35 | 53 | 61 | 84 | 118 |
|---|
| EBITDA growth, % | | 52.5% | 16.5% | 36.9% | 39.9% |
|---|
| EBITDA margin, % | 24.8% | 27.2% | 25.7% | 25.9% | 27.9% |
|---|
| Net Income | 20 | 26 | 28 | 40 | 53 |
|---|
| Net Income margin, % | 14.1% | 13.3% | 11.7% | 12.4% | 12.6% |
|---|
| |
| CAPEX | 17 | 37 | 54 | 70 | 99 |
|---|
| CAPEX/Revenue, % | 12.2% | 19.2% | 22.6% | 21.7% | 23.5% |
|---|
| Debt | 41 | 47 | 30 | 82 | 124 |
|---|
| Cash | 12 | 3 | 2 | 9 | 19 |
|---|
| Net Debt/EBITDA | 0.8x | 0.8x | 0.4x | 0.9x | 0.9x |
|---|
| |
| ROIC, % | 16.7% | 25.1% | 23.3% | 24.0% | 23.8% |
|---|
| ROE, % | 26.5% | 31.3% | 24.5% | 26.0% | 26.9% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Badger Daylighting Ltd showed EBITDA margin growth of 2 pp from 25.9% to 27.9% in 2014. If we look for the longer period the company showed small growth in EBITDA margin of 0.700 pp from 27.2% in 2011 to 27.9% in 2014.
We call Badger Daylighting Ltd an attractive growth stock as together with the growth it delivers high ROIC at 23.8%. Three years ago it was a bit higher at 25.1%. It's average level of ROIC for the last three years was 23.7%.
The company showed small growth in Net Income margin of 0.200 pp from 12.4% to 12.6% in 2014. In the longer period the company showed decline of 0.700 pp from 13.3% in 2011 to 12.6% in 2014.
Badger Daylighting Ltd operates at ROE of 26.9%. For the last three years the average ROE was 25.8%.
Capital expenditures (CAPEX)
To fuel this fast growth Badger Daylighting Ltd had to invest in CAPEX.Badger Daylighting Ltd's CAPEX/Revenue was 23.5% in FY2014. CAPEX/Revenue surged on 4.29 pp from 19.2% in 2011 to 23.5% in 2014. For the last three years the average CAPEX/Revenue was 22.6%.
Leverage (Debt)
The company has low debt level at 0.9x Net Debt/EBITDA - at the same time with high growth. In the last 3 years leverage increased on 0.06x from 0.83x in 2011 to 0.89x in 2014.
Valuation vs. comparable companies
The company trades at 9.1x EV/EBITDA which is 44.5% lower than 16.3x Industrial industry avearge calculated based on 168 companies. The market closed today at 18.1x P/E for Badger Daylighting Ltd which is 22.7% lower than 23.5x Industrial peer group avearge calculated on the basis of 47 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The market closed today at 57.3x EV/(EBITDA-CAPEX) for Badger Daylighting Ltd which is 2,260% higher than 2.4x Industrial peer group avearge calculated on the basis of 44 companies.
Peers in Industrial
Below we provide Badger Daylighting Ltd benchmarking against other companies in Industrial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Electrovaya Inc ($EFL) | | 104.3% | -4.0% | -71.2% | 160.5% |
| Carmanah Technologies Corp ($CMH) | | 5.8% | -26.4% | -2.0% | 68.8% |
| Exco Technologies Ltd ($XTC) | | 22.4% | 19.7% | 0.9% | 50.5% |
| Lumenpulse Inc ($LMP) | | | 56.7% | 33.9% | 47.0% |
| Avigilon Corp ($AVO) | | 93.7% | 65.2% | 72.6% | 41.9% |
| |
|---|
| Median (65 companies) | | 13.5% | 11.6% | 4.1% | 8.5% |
|---|
| Badger Daylighting Ltd ($BAD) | | 39.1% | 23.2% | 35.7% | 30.1% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Pure Technologies Ltd ($PUR) | 64.5% | 75.7% | 77.9% | 78.0% | 77.5% |
| Alarmforce Industries Inc ($AF) | 69.7% | 76.4% | 75.0% | 76.5% | 72.2% |
| Epicore BioNetworks Inc ($EBN) | 61.3% | 59.0% | 60.8% | 63.2% | 64.1% |
| Evertz Technologies Ltd ($ET) | 58.3% | 57.7% | 56.6% | 57.5% | 57.2% |
| Avigilon Corp ($AVO) | 45.1% | 45.7% | 49.3% | 54.2% | 56.6% |
| |
|---|
| Median (63 companies) | 23.1% | 23.2% | 23.6% | 24.0% | 24.3% |
|---|
| Badger Daylighting Ltd ($BAD) | 33.8% | 33.4% | 31.6% | 33.9% | 31.2% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Canadian National Railway Co ($CNR) | 46.5% | 46.3% | 46.5% | 45.9% | 46.8% |
| Canadian Pacific Railway Ltd ($CP) | 32.2% | 28.1% | 26.1% | 32.4% | 43.7% |
| Vitreous Glass Inc ($VCI) | 31.8% | 29.0% | 31.4% | 32.2% | 37.8% |
| Progressive Waste Solutions Ltd ($BIN) | 31.8% | 32.2% | 30.7% | 33.1% | 34.0% |
| Epicore BioNetworks Inc ($EBN) | 15.9% | 17.7% | 22.4% | 16.4% | 27.7% |
| |
|---|
| Median (59 companies) | 7.8% | 8.0% | 8.9% | 9.7% | 10.3% |
|---|
| Badger Daylighting Ltd ($BAD) | 24.8% | 27.2% | 25.7% | 25.9% | 27.9% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Cargojet Inc ($CJT.A) | 3.1% | 6.8% | 7.0% | 6.3% | 54.1% |
| Newalta Corp ($NAL) | 11.9% | 17.2% | 21.7% | 34.5% | 35.1% |
| ENTREC Corp ($ENT) | 0.0% | | 35.0% | 26.7% | 29.5% |
| Horizon North Logistics Inc ($HNL) | 17.4% | 25.1% | 26.5% | 16.3% | 24.1% |
| Canadian Pacific Railway Ltd ($CP) | 14.6% | 21.3% | 20.2% | 20.2% | 21.9% |
| |
|---|
| Median (65 companies) | 2.2% | 2.3% | 3.0% | 3.6% | 3.1% |
|---|
| Badger Daylighting Ltd ($BAD) | 12.2% | 19.2% | 22.6% | 21.7% | 23.5% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Vitreous Glass Inc ($VCI) | 28.8% | 26.1% | 30.5% | 32.3% | 48.3% |
| SNC-Lavalin Group Inc ($SNC) | 17.5% | 14.6% | 10.7% | 4.0% | 35.2% |
| Alarmforce Industries Inc ($AF) | 26.8% | 18.3% | 5.3% | 24.0% | 33.9% |
| Epicore BioNetworks Inc ($EBN) | 20.4% | 24.8% | 28.1% | 16.1% | 32.5% |
| STT Enviro Corp ($STT) | -65.1% | 88.7% | 55.1% | 44.3% | 30.4% |
| |
|---|
| Median (65 companies) | 8.8% | 9.6% | 10.6% | 9.0% | 10.9% |
|---|
| Badger Daylighting Ltd ($BAD) | 16.7% | 25.1% | 23.3% | 24.0% | 23.8% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Sigma Industries Inc ($SSG) | | | 4.4x | 11.3x | 225.9x |
| H2O Innovation Inc ($HEO) | | | | 4.2x | 73.2x |
| Cargojet Inc ($CJT.A) | 1.5x | 1.8x | 1.5x | 1.5x | 31.5x |
| Conifex Timber Inc ($CFF) | | | | 2.7x | 6.1x |
| Norbord Inc ($NBD) | 3.7x | 9.4x | 1.6x | 0.8x | 5.7x |
| |
|---|
| Median (53 companies) | 0.9x | 0.9x | 1.5x | 1.5x | 1.1x |
|---|
| Badger Daylighting Ltd ($BAD) | 0.8x | 0.8x | 0.4x | 0.9x | 0.9x |
