Mti Wireless Edge Share Discussion Threads

[brucie5] 04/9/2023 19:20

MWE not mentioned, but irrigation is one of their areas, is it not.

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In the southwest of the Netherlands, Jacob van den Borne is a third-generation farmer producing mainly potatoes but also sugar beet, wheat and barley, as well as small crops like parsnips and sweet potatoes across 900 hectares of land. As well as selling at home, he also exports to countries such as England, Germany, Belgium and France.

Mr van den Borne started investing in a wider variety of crops when he noticed the soil quality was deteriorating. An advocate of precision farming, he turned to GPS technology to measure, analyse and research his crops as efficiently as possible in order to achieve a higher yield.

He has invested in soil scanning technology which allows him to map and document every square metre of soil. "It gives me the ability to improve the soil potential and predict which are the good spots and fix the others."

He is also tapping into sensors and data infrastructure.

"I have spent about €1m on such investment, but I have a rule - don't invest in new toys before the old ones are paid off."

He says a key focus for the next year is variable rate irrigation, which provides pre-planned levels of water at controlled times. "This is irrigation on demand. We cannot control the weather but one thing that is really measurable is the weather. If there's no rain we can add water."

[rivaldo] 23/8/2023 09:22

Good to see the continuing rise here. And unsurprising given the value and potential.

Allenby's 90p target is a stretch in the current market, but in 6-12 months if all goes well MWE could have made very good progress towards it.

With a forecast cash pile equating to 8.4p per share, plus (1) ongoing strength in global defence markets for obvious reasons, (2) a ramping up of 5G spending as most are predicting, (3) the necessity for increased water efficiency/management and an improvement in general market multiples then MWE should continue to thrive.

[brucie5] 21/8/2023 12:52

Promising recovery, perhaps indicating the historic bottom at 40p? That might be confirmed were it to break up beyond the 200 sma at 50p. Though on recent form, it may more likely bounce down again until the share price compresses towards one way or the other.

[brucie5] 17/8/2023 11:04

rivaldo17 Aug '23 - 09:32 - 1377 of 1377
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Allenby Capital's new note reiterates their 90p share price target.
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In this market?!
I think for now shareholders will need to be satisfied by continued flow of dividends as a function of profitability and a bottoming of the share price.
That is what I'm looking for.

[rivaldo] 17/8/2023 09:32

Allenby Capital's new note reiterates their 90p share price target.

They forecast 4.28c EPS this year, with a $9.39m closing cash pile, i.e around 8.4p per share. The ex-cash P/E is therefore only 10.6 for this year.

They summarise:

"– Operational highlights:

Antennas saw new orders in military for existing product lines and requests for new solutions, across new and existing customers. MTI’s innovative ABS antenna for 5G backhaul is being evaluated by three tier one radio manufacturers and two
tier two customers. The opening of the Indian market for E-Band 5G backhaul has created a substantial multi-year opportunity, although orders remain sporadic, and MTI recently established a new local subsidiary. The Mottech division secured two longer contracts in April with an existing customer, a large Israeli municipality, worth $2.2m over five years, and fountain control also offers growth opportunities in an adjacent market.

– Outlook: MTI’s three divisions all enjoy strong medium term growth drivers – increased defence spending (Antennas and MTI Summit), water scarcity (Mottech) and the ongoing 5G roll out (Antennas). The outlook for defence is particularly strong (representing c. 44% of group H1 revenue (FY22: c. 37%)) and MTI’s design wins typically result in multi-year revenue opportunities. Forecasts remain unchanged with H2 growth expected at the top and bottom lines and the current share price fails to reflect MTI’s growth potential."

[rivaldo] 16/8/2023 13:50

Here's Simon's Thompson's tip (note the currency error for the EPS...fine apart from that):

"MTI boosted by defence spending and offers 6% yield

The technology group is set for another year of growth, but is only priced on a cash-adjusted PE ratio of 7.5 and pays a chunky dividend, too

August 15, 2023
By Simon Thompson

First-half pre-tax profit up 3 per cent to $2.1mn on slightly lower revenue of $22.4mn
Strong performance from defence sector-related activities
Second-half pipeline supports 11 per cent annual pre-tax profit growth

First-half results from Israel-based technology group MTI Wireless Edge (MWE:41p) highlight the benefits of diversification. For example, the group is benefiting from the increase in government defence budgets across the world following Russia’s invasion of Ukraine. Its antenna division trebled its operating profit to $0.28mn (£0.22mn) on revenue of $5.8mn in the six-month period, buoyed by new orders from the military sector. Chief executive Moni Borovitz expects the momentum to be maintained in the second half.

The antenna business also provides 5G network backhaul antenna systems. Although this market was relatively soft in the first half, MTI has materially increased its sales prospects by developing an automatic beam steering antenna solution that adapts to any small movements caused by different climate conditions. It is now working with three tier-one radio manufacturers and two tier-two customers to prove out the system.

The group offers investors exposure to the themes of climate change and water scarcity, too. MTI’s wireless water management systems division reported 11 per cent higher first-half operating profit of $0.96mn on slightly lower revenue of $8.7mn, the improved level of profitability reflecting price increases and the benefit of costs being in shekels in a strong dollar environment. This year’s heatwave across continental Europe, and the need for countries to use water resources more efficiently, can only be positive for sales prospects. The business has started the third quarter well.

The strength in both divisions offset weakness in MTI’s Summit electronics division, which represents 40 international suppliers of radio frequency/microwave components. Divisional operating profit declined a third to $0.78mn on 5 per cent lower revenue of $8mn, mainly due to delays with two projects. However, one has since been completed and the other is well under way, so expect a much improved second-half performance. Also, defence-related activities represent the majority of the unit’s revenue base, so increased government military spending is underpinning a strong pipeline of orders and design wins.

Earnings guidance maintained

Importantly, the directors are maintaining full-year guidance of 11 per cent growth in pre-tax profit to $4.8mn, which points to second-half pre-tax profit rising 18 per cent to $2.7mn on 13 per cent higher revenue of $26.7mn. On this basis, expect annual earnings per share (EPS) of 4.28p and a hike in the payout from 3¢ to 3.2¢ (2.5p). The dividend is rock solid, too. Net cash increased by 20 per cent to $6.25mn in the first half, and analysts at Allenby Capital expect a further rise to $9.4mn (8.35p) by the year-end, buoyed by strong cash generation.

So, with earnings guidance maintained, and the shares rated on a cash-adjusted forward price/earnings (PE) ratio of 7.5 and offering a 6.2 per cent prospective dividend yield, the share price drift since the 2022 annual results (‘A lowly rated technology group offering a prospective 5.5% yield’, 13 March 2023) is worth exploiting. Buy."

[rivaldo] 16/8/2023 09:33

Cheers igoe104 - could you (or anyone) post the tip here since it's subscription-only and a suitable amount of time has passed?

[igoe104] 15/8/2023 19:24

Simon Thompson positive wrire-up.

[johnveals] 15/8/2023 17:12

As some have already said, there's much to like about MWE. Buy the company not the share. I see this as a steady long term growth prospect.

[brucie5] 15/8/2023 16:01

Ok, may be some good support here and counterproductive to wait for further falls. I've bought in - got around 44p.

[rivaldo] 15/8/2023 13:38

Nice - and deserved - bounce.

Hi Brucie5 - yep, the divi yield is forecast at almost exactly 6% this year.

MWE have a long track record of steady growth over many years on AIM, have always been controversy-free and well run, and have been on the cusp of transofrmatative growth for a while and not quite getting there.

Now we have global growth in spending on defence, plus 5G hopefully about to take off, supported by the top of the range water efficiency and saving technologies.

[brucie5] 15/8/2023 13:07

Thanks Gopher, Cerrito, Rivaldo et al. What excellent company!
I notice that Roland Head also holds this from somewhat higher levels as a quality dividend stock. Notwithstanding that, is approach his quite thorough. I am definitely interested but the level as I say, still seems unstable given the chart. Dividend is currently around 6% I believe?

[gopher] 15/8/2023 11:57

Should have added that Herald have a 5% stake, as a small shareholder in a foreign company I like to see a UK institution involved

[cerrito] 15/8/2023 11:02

I see that the other joint broker with Shore-Allenby maintains forecasts and 90p per share.
Family holding good but does preclude a buyout.
Yes a good presentation. As always rather brusque in the Q&A, perhaps that is his style.
Very comfortable with my holding: made a small top up last week and have enough for now but zero intention to sell.
Given the worldwide water situation, I would have thought the water division would be going better.

[igoe104] 15/8/2023 11:01

Its three divisions should experience lots of tailwinds over the coming years, one for the patient investor, and pick the jucy dividend up as you wait.

[gopher] 15/8/2023 10:51

Reassuring presentation on investors meet. At first glance the lack of growth in turnover was my concern but this was explained as the result of currency weakness and so benefit the bottom line given costs are not in dollars. Actually reasonable growth overall.This is a not a shoot the lights out type of company but offers solid balance sheet, good dividend, family owned and some reasonable tech growth opportunities. Not much.to dislike and increased by holding.

[brucie5] 15/8/2023 09:11

I believe CR said he avoids Israeli companies since the market seems to distrust them. No kidding. Given the bullish comment here the continual decline of the share price seems at odds with reality - or is it vice versa?

Chart suggests 40p scant resistance, below which Sceptical is right. 30p looks to be the more secure area - it spent a year between 30-40p before breakout on the Covid recovery.

I don't hold, but 30p might tempt me given the dividend.

[rivaldo] 15/8/2023 08:15

:o))

Cheers hastings. I note too that Shore Capital have retained their 90p price target and current forecasts:

"Outlook and valuation:

In the March 2022 note we also highlighted that each of the divisions has
growth drivers with, in our view, Mottech particularly well placed to potentially see stronger demand than we forecast for its water management and control software. Today’s result statement highlighted the strong prospects for Mottech in Italy and France. Typically, the software improves the efficiency of irrigation systems, while reducing the cost of operating them. The Antenna division is likely to benefit from the rollout of 5G across the world, as and when it happens, as MTI
already supplies seven of the top ten operators with its technologies. We would also expect to see continued good demand for Summit/PSK with its defence-related products and services as demonstrated by the news that two key PSK projects have already made significant progress in Q3 FY23F.

Along with many stocks on AIM, the share price has drifted lower during 2023. We maintain a 90p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY23F EV/EBITDA multiple of 11.2x (the average of our peer group). We note also that the prospective 5.9% dividend yield for FY23F should also provide strong support."

[hastings] 15/8/2023 07:53

Yes, all on track and no changes from the broker in the note this morning, snippet below.

Conservative forecasts: We have consistently highlighted since we initiated coverage on MTI in May 2022 that MTI has a very strong financial platform, which it uses to grow sales both organically and through acquisitions. Any new business is expected to be incremental to margins and profits in the first year. In our view, the group has demonstrated this over the last 15 months with the organic growth in Summit in 2022 boosted by the PSK acquisition, while the H1 results for FY23F have shown good adj. EBIT progress for Mottech and Antennas. At the time of the FY22A results in March, we maintained our group forecasts for FY23F and FY24F and introduced numbers for FY25F. We continue to forecast sales and profit progress in each forecast year. Obviously, we have not assumed any further acquisitions in our forecasts, so given the company’s record of earnings enhancing deals, we would view any M&A as likely to boost forecasts and shareholder value.

[zipstuck] 15/8/2023 07:38

Divi of 3 cents should at least be maintained next year

[rivaldo] 15/8/2023 07:25

A steady and solid H1 in the current climate, with EPS increasing 9% to 1.99c and confidence in not only meeting expectations for the year but also going forward.

With the usual H2 weighting, plus delayed PSK contracts benefitting H2, there's a possibility that results will beat expectations of 4.2c EPS.

The cash pile has increased nicely to $6.25m, which is almost 6p per share in itself.

On an ex-cash P/E for this year of just 11 MWE are good value, but need to show in H2 that all the obvious opportunities in 5G, water and defence are coming to fruition given that each division seems incredibly well placed to thrive.

[rivaldo] 07/8/2023 07:31

Good to see you in here Robsy2.

Today's RNS notes H1 results will be next Tuesday 15th August, with an Investor Meet.

Above all, no mention of any problems, so we should be able to assume that everything's nicely in line following the Q1 outlook which was "confident" about the outlook for the year ahead.

[robsy2] 28/7/2023 11:22

Rivaldo- i see you are back and firing on all cylinders!
I have been trickling a bit more money into MWE. The whole market looks good value to my eyes but funds are limited, so i try and recycle funds from positions that have done relatively well e.g. REC and XPS and are overweight into those like MWE that are drifting lower. The idea is to rebalance and hopefully accelerate returns…That is the theory. I am not really sure why i even mentioned this!

[rivaldo] 28/7/2023 10:57

With approaching 8.3p per share in cash, and around 3.3p EPS forecast this year, MWE are on a miserly ex-cash P/E of only just over 10.

Shore Capital updated after the Indian subsidiary news - FYI here's their conclusion, retaining their 90p valuation:

"Outlook and valuation:

In the March note we also highlighted that each of the divisions has growth drivers with, in our view, Mottech particularly well placed to potentially see stronger demand than we forecast for its water management and control software. Typically, the software improves the efficiency of irrigation systems, while reducing the cost of operating them. The Antenna division is likely to benefit from the rollout of 5G across the world as it already supplies seven of the top ten operators with its technologies. Today’s news of the establishment of its Indian subsidiary positions it particularly well in the Indian market, in our view. Summit/PSK had a strong FY22A and we would also expect to see continued good demand for its defence-related products and services as demonstrated by the recent contract win.

The share price has drifted lower since the release of the Q1 results in May. Ahead of Q2/H1 FY23F results in mid-August, we maintain a 90p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY23F EV/EBITDA multiple of 11.2x (the average of our peer group)."