It was only a few months back in October that I last penned something here on MTI Wireless Edge (MWE), the shares then having eased a touch on a red market day to 46p.
On a personal level I had already noted that the momentum had been building and the news emerging from the company was positive. With such sound fundamentals too, it was very much a case of going with the trend and sticking with a winner.
That decision has thus far proved correct and MWE’s shares are this morning trading around 81p after the company announced some very welcome contract news concerning one of its divisions.
To recap - Firstly, MWE is a designer, manufacturer and supplier of specialist antennas and associated accessories for both commercial and military applications with an increasing exposure to 5G.
Additionally, it is also a provider of remote control solutions for water and irrigation applications, an area that is ripe for ongoing and potentially substantial growth, whilst there is a third operation which I will come to.
Following my earlier piece from October, the company subsequently announced some positive news, both on the results front and further contract announcements. All of which conspired to attract a wider investment audience that has resulted in the shares gaining attention and moving further northwards.
Whilst such a positive run has no doubt resulted in some exiting for a decent return, the news today really further underlines the potential here, firms up the investment case and suggests to me that MWE is another stock worth sticking with, particularly given that there is likely to be further contract news in due course.
The announcement in question this morning, was perhaps all the more positive as it has emerged from the company’s third arm, which has arguably been overshadowed by the Antennas and Mottech water divisions.
Nevertheless, the distribution and professional services offering has also been performing strongly and the news today suggests that the future here also remains very positive.
Working with some forty global suppliers of radio frequency and microwave components under the MTI Summit Eelctronics brand the contract news relates to what are described as several significant orders totalling $1.7m with the majority to be delivered in Q1 of this year.
The company added that the growth of this division over the last two years is a result of increasing defence budgets and demand for more bandwidth and network security amongst customers.
This, together with Israel being an international hub for the development of defence technology fits well with MTI Summit's strong position in Israel based on the large portfolio of products it represents, coupled with its expertise and relationships with customers.
The CEO Moni Borovitz, commented: "We are very pleased to have received these increased levels of orders at the beginning of the year for immediate supply, especially from a strategic customer, indicating that the relationship is strengthening which bodes well for the future. Trust is a particularly important factor in the defence sector and once earned can lead to the establishment of important long term business relationships"
With all three divisions well placed for 2021 and operating in very resilient and indeed growing markets, MWE continues to look attractive even with the recent share price movement northwards. For what is effectively a technology play, it boasts attractions that eludes many other Small-Cap plays across the sector in addition to growth, with a solid and robust balance sheet that sports a decent net cash position that is expected to stand at $8.5m for full year 2021.
Additionally, there is a decent freehold property on the books along with the added attraction of a progressive dividend which serves to further support the investment case.
More news looks likely in the coming months and that could come from any of the three arms where it would likely not only further underpin the story, but possibly lead to increased expectations.
Whilst all three certainly whet the appetite, as a holder of the shares I’ll be keeping a close eye out for further news from the Mottech Water division particularly concerning China where it has established a presence in recent years and growth potential looks exciting.
The systems supplied by Mottech allow for a number of water solutions including supporting farmers managing their irrigation systems both on hand and remotely by monitoring and controlling quantities of water and fertilizer on a crop-by-crop basis.
Importantly, there is a double win in that the products not only prove very cost effective and boost yields but are also very much eco-friendly being supportive of managing water in regions where it is scarce.