Tipped overnight by Simon Thompson in the IC8 Mar 2022 10:01
Good summary by ST, pointing out that MWE are on a P/E of 12 net of the $12.5m of cash (10.7p per share), and that as I posted previously the dollar has surged against the shekel since the year end, which will benefit MWE this year.
Here's his conclusion:
"For example, MTI’s antenna division is feeding off growing demand for 5G network backhaul antenna systems (accounting for 20 per cent of divisional sales) and military antenna (30 per cent of sales). MTI has just received a trial order, from a Tier 1 OEM vendor for its new automatic beam steering 5G antenna. The technology ensures that the antenna automatically adapts to any small movements or vibrations caused by different climate conditions, including wind or temperature, to maintain a stable signal.
The global wireless backhaul market is dominated by seven key OEM vendors which supply radio equipment to the main cellular network operators and support the roll-out of 5G infrastructure. MTI is now working with five of them, and chief executive Moni Borsovitz says that MTI is now in discussions with more potential customers. Although still only a small part of the overall group, accounting for 6.4 per cent of total operating profit, Borsovitz expects the antenna business to report robust growth this year.
He also outlined strong drivers for MTI’s wireless water management systems division, which reported a 7 per cent rise in annual operating profit to $2.1mn on revenue of $17.6mn. MTI has just announced a partnership with Viridix, a specialist in actionable data analytics for irrigation that measures the water available to the roots of crops. The technology is being integrated with Mottech's real-time irrigation monitoring, control and reporting software, so that customers can monitor crop root activity and implement an irrigation protocol across farms in real time. The sensors only cost farmers a few hundred dollars per hectare, but can reduce water usage by more than a quarter. It is likely to prove a lucrative recurring revenue stream.
MTI’s Summit electronics division, which represents 40 international suppliers of radio frequency/microwave components, increased operating profit by 15 per cent to $1.85mn last year, buoyed by high levels of government spending on defence. That’s not going to change anytime soon.
I initiated coverage on the shares when they were priced at 40p (Alpha Report: ‘Tapping into 5G and climate change technologies’, 4 September 2020), and the price subsequently doubled in value. Underpinned by a prospective dividend yield of 4.9 per cent, and trading on a cash-adjusted price/earnings (PE) ratio of 12, the shares are priced for a profitable outcome. Buy."
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