Date of Data Capture: 29/6/2017
Name: MITULA GROUP LTD (MUA)
Classification: Software & IT Services
Current Price: $0.94
Market Capitalisation: $201M
Forecast EBITDA Growth: 42.52%
Gross Yield: 0%
Consensus Price Target: $1.30
# Covering Analysts: 1
Discount at Current Price: 38.30%
Price Target Trend: Increasing Flat
Signal Timeframe: Monthly-Weekly-Daily
Trend Bias: Up Flat Long-Short
Short-term: Positive Neutral
Focus: Capital Growth
Set up Notes:
• MUA is capable of aggressive moves – here we find them working against major resistance which is so far holding down a potential rally backed by good fundamental performance and forecasting that combines well with an exciting, highly-correlated technical setup.
• With earnings growth above 30% last year and even greater growth predicted for the year ahead, MUA should have good newsflow on top of a price target above old highs at $1.30.
• Technically strong with positive multi-timeframe signalling coming through underneath overhead resistance at $1.00, $1.10 and $1.20 - with good support layered down from 90c, 85c and 80c.
Growth Focus: Mitula Group Ltd. (MUA)
Our primary focus here is capital gain, we will select our stocks from the ASX top 500 All Ordinaries Index.
An investment in patience is normally well rewarded, we hope this will be the case with Mitula Group Ltd (MUA) whose Sanskrit meaning is moderate, meticulous or patient. We think this reflects the situation well and after waiting for the last pullback to complete we are ready to strike as they look poised to run once more.
This Spanish technology company is headquartered in Madrid and took its first steps forward in 2009 before listing on the ASX in 2015. Holding an Australian office in Melbourne, the company operates 104 vertical search websites across 51 countries for clients including Real Estate, Motoring, Cars, Jobs, Holiday Rentals and Fashion. Their global span provides them with good exposure to developing markets across Europe and South America, offering excellent grounds for continued strong growth as they look to raise their stakes.
Following a high margin, low recurring cost business model has allowed them to build a strong cash position and is backed by very strong growth seen across sales, earnings and profits. Last year saw an impressive EBITDA growth rate over 33% and this is forecast to increase a further 40%+ into 2018. One red flag on the fundamental side is their very limited single broker coverage - though this has only just reduced from two and didn’t change aggregate targets significantly. Steering the company we have Chairman Simon Baker taking charge and based on previous experience - and declared acquisition strategy - might be able to turn this debt-free cash cow into a proverbial bull in a China shop.
Technically, they are somewhat erratic in the weekly timeframe we have pictured (their lack of trading time on the ASX reduced the depth of our longer-term signalling too much to use here) but they do show good correlation and positive momentum developing in the medium-term with positive signalling in the long and shorter-termed timeframes. The obvious barrier is overhead resistance at $1.00 and while this sort of round-numbered psychological structure normally represents a significant hurdle, with MUA this may not prove to be a resilient barrier due to the sheer volatility and aggressive nature of the stock. If prices remain penned we have good support layered down to 90 and 85c here, but we would expect pricing to stretch its legs beyond that fence once it is cleared.
With excellent past performance, extremely bullish fundamental forecasts and exciting technical setup we may not have to rely on patience over much after all, if Mitula can keep on doing what it is already
doing their pedigree should come to the attention of the greater market faster than you can say vamanos rapido!