Very nice. All eyes on Results on Monday 17th… |
 The Mail's tip for those who can't access it as it's paywalled - the info re drones is particularly interesting::
"Defence stocks are soaring in value, but ignore the big guns and cash in with our finance expert's guide to these brilliant value hidden gems"
"MTi Group
Russia’s brutal invasion of Ukraine is upending convention, not just in terms of who sides with whom but also in how war itself is waged. Drones have become a key weapon, with the Ukrainians upping production to almost four million a year and Russia racing to keep pace.
In order for these unmanned vehicles to be effective, they have to be deadly accurate both in where they are going and how.
MTI Wireless Edge helps drones to reach their destination, even if they are beset with obstacles, from natural hazards to sophisticated jamming techniques designed to throw unmanned vehicles off-kilter.
Headquartered in Israel, MTI is a world leader in the production of antennae, supplying defence companies both at home and across the globe. The kit is used to direct drones in the air, on the ground and at sea. The antennae also help to identify and intercept rocket attacks and can even be wrapped around missiles to maximise accuracy and reduce risk.
With the world becoming more unpredictable by the day, interest in MTI products is growing, not least in Germany, which is building a new missile defence system deploying MTI’s equipment. Elsewhere too, orders are coming in thick and fast from a substantial pipeline of new opportunities.
MTI is a pioneer in irrigation as well, developing sensors that can reduce water usage by up to 35 per cent. Initially developed for arid regions – including California, Australia and the Arabian Gulf – recent orders have come from France, Italy and even Sweden, as farmers and park owners strive to keep land fertile amid changing weather patterns.
Moni Borovitz, MTi Group’s chief executive, also builds antennae for 5G towers, a fast-growing market where annual expenditure is approaching £75 million.
MTI has honed its technology at home but around 55 per cent of revenues are generated overseas – a percentage that is likely to increase over time.
Results for 2024 are out later this month and should reveal rising sales and profits, with further growth expected this year and beyond. MTI pays decent dividends too, with 3.3 cents (2.6p) expected for the year just ended, rising to 3.4 cents this year and 3.6 cents next.
The Borovitz family owns about 30 per cent of the shares, so members’ interests are closely aligned with individual shareholders, and since MTI floated on Aim in 2006 dividend payments have been missed only once, after the global financial crisis.
Midas verdict: At 58p, MTI shares are well below their 2021 peak of 87p. That seems undeserved. The company’s technology is world-class and interest is growing. Buy." |
Great start to the week here. Are we heading for an all time high? |
delta: your quote from last Wednesday is very apt "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." |
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. |
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