 Rivaldo
Continuation of Simon Thompson Article:
Last month, the group received three orders from a system house in Israel to develop and manufacture military antennas worth a total of $1mn. The contract awards highlight a growing trend of local system houses outsourcing their antenna manufacturing, and include a development order for a new technology, too. It’s significant as it moves MTI up to a sub-system level, meaning it will provide further capabilities in addition to antennas within the customer’s solutions.
Analyst Rob Sanders at house broker Shore Capital has left pre-tax profit estimates unchanged at $5.2mn (2025) and $5.6mn (2026), but he notes that “if further significant orders are secured then there is upside potential to estimates”. That seems highly likely and not just from military customers as Sanders expects the rollout of 5G, such as in India, to lead to further contract wins in due course. India is a substantial market for MTI’s 5G antennas with 900mn cellular phones currently in use across the country. Having high-speed 5G backhaul solutions in place is essential for transferring data from mobile towers to the core network. The antenna business accounts for around a third of group operating profit.
It’s worth noting that analysts see potential for stronger demand than forecast from MTI’s water control business, too. Accounting for half of group operating profit, the unit provides wireless control systems to manage irrigation and water distribution for agriculture, municipal authorities and commercial entities.
Potential for earnings upgrades underrated
Although analysts expect last year’s results to be relatively flat, pencilling in slightly higher pre-tax profit of $4.9mn and earnings per share of 4.5¢ (3.6p), the highly cash-generative business should increase net cash by 15 per cent to $9.3mn (£7.4mn) to support a 6 per cent hike in the dividend per share to 3.3¢ (2.6p).
On this basis, the shares trade on a cash-adjusted price/earnings (PE) ratio of 12.7 and offer a dividend yield of 4.8 per cent. That’s an attractive entry point given that pre-tax profit is expected to grow by 15 per cent over the 2025-26 forecast period even in the absence of likely earnings upgrades. Furthermore, MTI’s cash pile could hit $11.1mn (£8.9m) by the end of 2026, a sum equating to almost a fifth of the market capitalisation of £47mn.
Interestingly, from a technical perspective, MTI’s share price is on the cusp of making a bullish chart break-out above the 55p resistance level. So, having last suggested buying the shares at 42p (‘Analysts were right to expect more from this defence stock’, 2 September 2024), I feel the share price is likely to continue trending higher ahead of the annual results on 17 March 2025, and well beyond. Buy. |
Will it break out of resistance at 56p? |
Will it break out of resistance at 56p? |
Gunwalloe (or anyone else), do you have the rest of Simon Thompson's tip?
"A defence stock growing its financial armoury
Simon Thompson: The company is winning major new orders
A defence stock growing its financial armoury
Published on February 14, 2025
by Simon Thompson
Significant orders for military antenna
Potential for earnings upgrades
Rated on cash-adjusted price/earnings (PE) ratio of 12.8 (2024)
Prospective dividend yield of 4.8 per cent (2024)
Israel-based technology group MTI Wireless Edge (MWE:54.5p) has won a significant repeat order worth $4mn (£3.2mn) from a system house in Israel to manufacture military antenna.
Chief executive Moni Borovitz notes that it is “one of the largest orders we have ever received and demonstrates our ability to deliver high-quality innovative solutions to meet our clients' needs”. The state-of-the-art antennas are designed to deliver unmatched accuracy and robust communication, and are integral to “one of the most advanced systems of its kind in the world”.
etc" |
Looks like MWE have just been tipped today on Master Investor by Mark Watson-Williams:
"MTI Wireless Edge – Defence Orders Boost Signal
Significant defence sector repeat order shines the light on this £48m company, with a growing backlog of orders, noteworthy in such globally hostile times.
Mark Watson-Mitchell
Feb 18, 2025"
"Last Wednesday, 12th February, MTI Wireless Edge (LON:MWE) announced a significant repeat order from a system house in Israel, worth $4m for the manufacture of military antennas.
CEO Moni Borovitz sounded absolutely delighted when imparting the news to the group’s investors.
"We are thrilled with this repeat manufacturing order as it is one of the largest orders we have ever received and demonstrates our ability to deliver high-quality services and innovative solutions to meet our clients' needs.
The order entails the supply of state-of-the-art antennas and is integral to an end use which is considered to be one of the most advanced systems of its kind in the world.
etc" (unfortunately for subscribers only) |
Cheers Gunwalloe.
And Allenby Capital have also updated today as follows:
"MTI Wireless Edge Ltd* (MWE.L, 53p/£46m)
Contract win: Substantial antenna repeat order (12.02.25)
• Substantial repeat order in the Antennas division from a system house in Israel for the manufacture of military antennas. The order is worth c. $4m and is expected to be delivered until June 2026.
• Represents one of the largest orders that MWE has received and demonstrates its ability to deliver highquality services and innovative solutions. The order entails the supply of start-of-the-art antennas and is integral to an application that is considered one of the most advanced systems globally, that requires unmatched accuracy and robust communication.
• FY24 results scheduled for Monday, 17 March.
• No change to forecasts or 75p/share fair value.
Allenby Capital comment: The repeat manufacturing order demonstrates the strength of MTI's antenna production technology and and its reputation for providing highly innovative antennas in the global defence and commercial industries.
As discussed in the Q3 results (25.11.24), the Antennas division is seeing good demand, reflecting ongoing increased global defence spending and a pick up in sales of its 5G backhaul antenna solution in India. There's a significant order backlog and a number of submitted tenders awaiting responses. The Antennas division is complemented by Mottech and MTI Summit/PSK where there were signs of improvement and good sales pipelines in Q3. Shares have performed well recently (+17% over three months) but the current rating (FY25 PER (net of cash) 12.0x) is not demanding and there is a comfortably covered 5.0% yield." |
Good start to week. share price on the rise and positive coverage from the latest Investors Chronicle (firewall). Should head closer to broker’s conservative target of 80p. |
Agreed igoe104.
With MWE forecast to have around 8.7p per share in net cash, the 2025 forecast of 4.7c EPS means MWE at 52p are still on an ex-cash P/E of only 11.4.
Shore Capital have maintained their 80p target and current forecasts this morning, but note the "upside potential".
They conclude:
"Our investment case is built on the premise that we believe that each of the divisions has growth drivers with, in our view, Mottech particularly well placed to potentially see stronger demand than we forecast. as its software improves the efficiency of irrigation systems, while reducing the cost of operating them.
However, as has again been reinforced by today’s news, we expect to see good demand for the defence-related products. as they benefit from increased defence spending around the world. We also expect the rollout of 5G, such as in India, to lead to further contract wins in due course. We maintain our 80p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY24F EV/EBITDA multiple of 12.8x (the average of our peer group)." |
Should get a lovely dividend in April. As the dollar is much stronger than last year and I expect a improvement in results as well..
So in March we should see a increased dividend announcement at a much better currency rate.
WIN WIN... |
Terrific news - a $4m antenna manufacturing contract win, "one of the largest orders we have ever received":
"The order entails the supply of state-of-the-art antennas and is integral to an end use which is considered to be one of the most advanced systems of its kind in the world. The antennas are designed to deliver unmatched accuracy and robust communication, leveraging our sophisticated and complex production technology. This win and others like it, add to our growing reputation for providing highly innovative antenna solutions and we look forward to continuing to work closely with defence companies from around the world." |
Allenby Capital's latest update FYI from late January - 75p fair value:
"MTI Wireless Edge Ltd* (MWE.L, 52.0p/£45.2m)
Update: Antenna contract wins (14.01.25)
• Three orders worth c. $1m from an existing system house customer in Israel for the development and manufacture of military antennas for delivery during 2025.
• The orders fit with the previously identified trend (26.09.24) of local system houses outsourcing antenna manufacturing. Two of the contracts cover manufacturing, whereas the third is a development order for a new technology. This moves MWE up to a subsystem level provider i.e. a greater share of spend.
• No change to forecasts or 75p/share fair value.
Allenby Capital comment: The orders increase revenue visibility for the Antennas division for FY25. The manufacturing orders fit with the trend for outsourcing by local system houses and the development order results in MWE securing a greater share of customer spend. Demand remains strong in Antennas and MWE's unique ABS 5G product offers a large medium-term opportunity. There were signs of improvement in Mottech and MTI Summit and good sales pipelines in November's Q3 results. Shares have recovered from recent lows, but MTI’s FY24 valuation remains undemanding (FY23 EV/EBITDA: 7.1x) plus the well covered 5.4% yield." |
Wonderful to see a cease fire in the middle east, could be a rerate for MWE, as they have three quality divisions.
. |
Following yesterday's contract wins Shore Capital have reiterated their 80p target price.
With MWE forecast to have around 9p per share in cash, the 2025 forecast of 4.7c EPS means MWE are on an ex-cash P/E of only 11.2.
Shore Capital conclude:
"Outlook and valuation:
We make no changes to any of our group forecasts on the back of today’s news but, obviously, if further significant orders are secured then there is upside potential in FY25F and FY26F.
Our investment case is built on the premise that we believe that each of the divisions has growth drivers with, in our view, Mottech particularly well placed to potentially see stronger demand than we forecast. as its software improves the efficiency of irrigation systems, while reducing the cost of operating them.
However, as has been reinforced by today’s news, we expect to see good demand for the defence-related products. as they benefit from increased defence spending around the world. We also expect the rollout of 5G, such as in India, to lead to more contract wins in due course.
We maintain our 80p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY24F EV/EBITDA multiple of 12.8x (the average of our peer group)." |
Hopefully a re rating will occur now that the war is almost at an end. |
New contract..
MTI Wireless Edge Ltd
("MTI" or the "Group")
New Contract Wins
MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to announce that its Antenna division has received three orders from a system house in Israel for the development and manufacture of military antennas worth a total of approximately US$1m, which are to be delivered over 2025.
Commenting on the contract wins, Moni Borovitz, CEO, said: "As announced several months ago, we continue to see a growing trend of local system houses outsourcing their antenna manufacturing and we are well placed to meet this demand. In this instance, we received two manufacturing orders, reflecting the customer's satisfaction from past services, and one development order for a new technology, which moves us up to a sub-system level, meaning we will provide further capabilities in addition to antennas within customer solutions." |
Ticking up nicely. |
Rivaldo - so you did. I should have read your post properly rather than skimming it. |
Private equity will spot an undervalued company and make a move. Watch this space. |
That's what I just posted about :o)) |
Let's just hope they don't look to take it private at a bargain price. |
IMO the directors are buying to take advantage of a bargain share price given the fundamentals, the cash pile and the prospects.
MWE have been a quoted company for many years now. The directors have had plenty of opportunities to take the company private at cheaper prices when the share price was 25p, 30p, 35p...but they haven't.
I suspect the stock market listing gives them the credibility and sound footing which their mainly blue chip clientele (4 of the top 7 global telcos for example) require.
MWE are on the cusp of seeing all 3 divisions take off given the global rise in defence spending, the increasing implementation of 5G and the need for usage and cost savings in water irrigation and distribution.
All JMO of course, and I could be wrong! Anyway, the large director buying just before the year end is hopefully a positive indicator of what the year end trading statement will bring - it would seem nonsensical to be doing so otherwise. |
Likely a bid to take company private. Value will not be realised with stock market listing. |
Yes Rivaldo, that's a Big Green flag... |
Extremely heavy director buying just before the year end...perhaps a bit of a clue to the year end results :o))
The CEO and Chairman's family company have bought £150,000 of shares and now own 33.11% between them.
Plus the Beer family have bought £193,000 of shares and now own a further 11.19%.
And MWE themselves bought in another 100,000 shares: |
Solid Q3 results, helping the nine months' EPS up 11% to 3.6c.
There's also almost $5m in the bank after $1.1m of buybacks.
Most importantly the outlook remains positive short and long-term, with 5G, defence and irrigation/water conservation all key global sectors for investment for the foreseeable future:
- "Q4 has begun well"
- new antenna solution now moving into pre-production
- MWE's own wireless irrigation controller being introduced
- Indian 5G sales rising on "new orders from a leading cellular service provider"
- "Increased demand for military antennas globally"
- Summit expected to have an improved Q4 for a number of reasons
Incidentally, Shares Magazine states that the Miton UK Microcap trust may well simply be "rolled into another of Premier Miton’s open-ended funds, so this may not be the end of the road for investors." |
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