MTI Wireless Edge – now is the time to jump in and take out cheap stock, record order book, shares 48p, broker’s ‘fair value’ is 100p

MTI Wireless Edge – now is the time to jump in and take out cheap stock, record order book, shares 48p, broker’s ‘fair value’ is 100p

Mark Watson-Mitchell

With President Trump’s Tarriff Wars now in swing, markets have collapsed globally, with the capitalisations of many companies being reduced across the board.

Such market movements tend to offer up opportunities that investors often regret that they didn’t take avail of cheap stock.

Just one such situation is MTI Wireless Edge (LON:MWE), the Israeli-based technology group, its shares which were up to 70.90p four weeks ago, dipped to 48p today.

On Tuesday, 11th March this year, I wrote about this company, stating that:

“I have no doubt that this group’s shares are heading a great deal higher.

Hold very tightly to your current positions and if you are not already a holder, then just bide your time waiting to take advantage of inevitable bouts of profit-taking.”

The price swings over the last four weeks now gives risk-tolerant investors an ideal chance of buying cheap stock.

The Business

Founded in 1970, the now £41m-capitalised MTI has grown into a global provider of comprehensive radio frequency communication solutions that serve top-tier customers worldwide.

MTI’s innovative technology solutions meet the growing demand for next-generation 5G networks, that address global warming and climate change, and strengthen defence communications.

The Israel-based group is a technology group focused on comprehensive communication and radio frequency solutions across multiple sectors.

The group operates through three core divisions: Antenna; Water Control & Management; and finally, the Distribution & Professional Consulting Services division.

The Antenna division

MTI is a world leader in the design, development and production of high-quality, state-of-the-art, and cost-effective antenna solutions including Smart Antennas, MIMO Antennas and Dual Polarity Antennas for wireless applications. MTI supplies antennas for both military and commercial markets from 100 KHz to 174 GHz.

Internationally recognised as a producer of commercial ‘off-the-shelf’ and custom-developed antenna solutions in a broad frequency range, MTI addresses both commercial and military applications.

MTI supplies directional and omnidirectional antennas for outdoor and indoor deployments, including smart antennas for 5G backhaul, Broadband access, public safety, RFID, base station and terminals for the utility market.

Military applications include a wide range of broadband, tactical and specialised communication antennas, antenna systems and DF arrays installed on numerous airborne, ground and naval, including submarine, platforms worldwide.

The Water Control & Management division

Via its subsidiary, Mottech Water Solutions, MTI provides high-end remote control and monitoring solutions for water and irrigation applications based on Motorola's IRRInet state-of-the-art control, monitoring and communication technologies.

As Motorola's global prime-distributor Mottech serves its customers worldwide through its international subsidiaries and a global network of local distributors and representatives.

With over 25 years of experience in providing customers with irrigation remote control and management, Mottech's solutions ensure constant, reliable and accurate water usage, increase crops quality and yield while reducing operational and maintenance costs providing fast ROI while helping sustain the environment.

Mottech's activities are focused on the market segments of agriculture, water distribution, municipal and commercial landscape as well as wastewater and storm-water reuse.

The Distribution & Professional Consulting Services division

Via its subsidiary, MTI Summit Electronics, MTI offers consulting, representation and marketing services to foreign companies in the field of RF and Microwave solutions and applications including engineering services (including design and integration) in the field of aerostat systems and the ongoing operation of Platform subsystems, SIGINT, RADAR, communication and observation systems which is performed by the Company.

It also specialises in the development, manufacture and integration of communication systems and advanced monitoring and control systems for the Government and defence industry market.

Significant Mottech contract extension

Yesterday the group announced that its subsidiary Mottech Water Solutions has secured a three-year contract extension with one of the largest municipalities in Israel. 

The contract extension is worth approximately $1.5m over the period.

CEO Moni Borovitz stated that:

"This is another good example of the quality of service we provide for our customers over the long-term and their satisfaction with our services.

As we have said before, all new service agreements include price increases and of course add to our recurring revenue streams."

The Equity

There are some 86.2m shares in issue.

The larger holders include the Borovitz family (33.11%), the Beer family (11.19%), Directors etc (6.44%), Herald Investment Management (5.17%), Premier Fund Managers (5.10%), Chelverton Asset Management (2.36%) and Canaccord Genuity Wealth (2.17%).

Broker’s View

Research analyst Rob Sanders, at Shore Capital Markets, now has a ‘Fair Value’ estimate on the group’s shares at 100p, having lifted it from 80p a share.

For the year now underway to end-December, he looks for $51.5m revenues, $5.2m of adjusted pre-tax profits, 5.1c earnings and a 3.4c dividend per share, with this year’s net cash position of estimated at $8.5m at the year-end.

Looking into the 2026 year, he suggests revenues of $55.0m, $5.6m of profits, 5.4c earnings and a dividend of 3.6c per share.

With the 2026 net cash position of $9.9m at the year-end.

His estimates for the 2027 trading year are for $57.7m revenues, $5.9m profits, 5.8c earnings and a 3.7c per share dividend, whilst ending the year with a healthy $11.5m net cash position.

Analyst David Johnson, at Allenby Capital, notes the group’s record backlog of orders plus a substantial sales pipeline.

His recently increased valuation of the group’s shares comes out at 83p, based upon his expectation of the group’s further revenue growth in its Antennas business, with returns to growth in its other divisions too.

His estimates for this year are for $50.5m sales, $5.31m profits, 5.22c earnings and $7.49m net cash at the year-end.

For next year he goes for $54.50m revenues, $5.83m profits, 5.66c earnings and $10.39m net cash as the year closes.

My View

With the shares at just 48

p, my message is short and sweet – just get out there and buy some cheap stock now.

(Profile 25.09.24 @ 49.50p set a Target Price of 62p*)

Asterisk * denotes that the Target Price has been achieved since Profile publication.