MiX Telematics Limited (NYSE:MIXT)

MIXT ($8.24) announced Q1 2018 results:

• Sales of $31.1 million vs $29.0 million in the prior year

• EPS of $0.10 vs $0.04 in the prior year

• Raises full year 2018 sales guidance to $124.5 million to $126.7 million from $123.5 to $125.8 million

• Raises full year EPS guidance to $0.38 to $0.42 from $0.34 to $0.38

Commentary from management:

“We have booked a solid start to our new fiscal year.  In particular, we enjoyed strong performance from our premium fleet portfolio globally which resulted in a return to mid-teen subscription revenue growth on a constant currency basis,” said Stefan Joselowitz, Chief Executive Officer of MiX Telematics. “As is evidenced by our steadily improving bottom-line performance,  the company has reached an inflection point in regards to margin accretion, particularly as MiX is moving out of a heavy investment cycle into a phase where we are starting to enjoy the returns on these investments. Looking forward, we are confident in our ability to execute our strategic initiatives to achieve our longer term targeted adjusted EBITDA margin of 30% plus.”

Shares have typically had slow reactions to earnings reports.  We are keeping a close eye on MIXT today.

GeoInvesting follows content on public companies all over the web so that you don’t have to.  As part of our premium service, we find content that we think is actionable in nature and strong in its diligence, we vett it, and we then pass it along to you.

Today, we’re passing along this article on Mix Telematics (MIXT) by Tal Davidson, submitted to Seeking Alpha as a contrarian pick. MIXT is a stock we’ve been tracking for a few weeks now, due to its appeal as a SaaS-business conversion story. Mr. Davidson’s past articles on MIXT have been accurate and coincide with Geo’s thesis on the company.  

Tal Davidson’s Summary on MIXT:

• MIXT is my best contrarian pick, and my largest portfolio holding, as of writing.

• The company issues two consecutive cautionary announcements, indicating that it is "exploring strategic alternatives." I believe that an acquisition is near, and I explain why.

• My analysis of precedent M&A transactions concludes that MiX is attractive as an acquisition target, as it is undervalued, and holds unique qualities and assets.

• The valuation is absurdly cheap, both as a going concern and as a resource conversion opportunity.

See the remainder of the article here.