MITK

Is this another PN? Too hard to know what’s going on? I keep wanting to take advantage of the share price being down 30-40% (depending on when you start counting) and add more shares…but I can’t convince myself I shouldn’t rather sell it all and move on.

Why should we believe in this company?

Is it time to fish? Or cut bait?

Bear

Thinking the same things

Joe
Community Fool - Ticker Guide OKE, PRLB, MTZ, & SRCL
click link for my profile & holdings
http://my.fool.com/profile/CMFJambo/info.aspx

For what it’s worth, I invested in MITK from November 2010 to November 2012 using mostly options and had an IRR of 17%. IIRC I gave up on MITK because despite it’s very interesting technology there were too many other technologies competing for market share so it went on my too hard pile.

Denny Schlesinger

From my perspective MITK and PN share the aspect of being very small and thinly traded. That’s where the similarities end.

Maybe it’s just me, but I still don’t really understand what PN does. And the management seems to be into playing games with the stock which can severely undercut the investor.

MITK has an easily understood, patent protected product which addresses a service requirement of mobile banking. The management team seems focused on promoting their product (sure to be expanded to additional products).

Personally, I bailed from PN and didn’t look back. Up until just after the election when I liquidated nearly everything, I maintained a small position in MITK. I’ll probably buy back in. I won’t touch PN again.

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Is this another PN? Too hard to know what’s going on? I keep wanting to take advantage of the share price being down 30-40% (depending on when you start counting) and add more shares…but I can’t convince myself I shouldn’t rather sell it all and move on.

Hi Bear, I can’t figure out either why this is selling off so much, so I have not added and have even sold some because I don’t know what’s going on. It’s by far my smallest position now, but I haven’t sold out. It is thinly traded and a small company so just one large holder selling out of his position could probably do this to the company. For a hypothetical, say one large holder died, and his heirs, or the bank trust department managing the trust for his heirs, says (for they surely would): “What is this tiny company?. Let’s sell it and put the money in something large and safe… like IBM.” I say this as there is no bad news about the company to explain it.

Just random thoughts.

Saul

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I see the consensus forecast of EPS for the current Q went from 6 cents to 3 cents. If I owned this, I would listen to the conf call and learn why. And/or call IR and ask why.

It may be something. It may nothing. But I’d want to know.

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I think this is just a part of the large emphasis shift following the elections. MITK shares the same label “internet business” with the big names that took a hit as well (AMZN, GOOGL etc).

I still believe their business is doing well and is not easily replacable.(Imagine being the bank manager campaining for replacing a perfectly functioning security-critical system - you don’t want to put your neck in that noose).

I’d say it’s a buy opportunity.

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forecast of EPS for the current Q went from 6 cents to 3 cents…listen to the conf call and learn why

Their FY ends on 30Sept; so current Q is 1Q17. They stated it’s usually their lowest revenue quarter.

2017 YE forecast for revenue is $43-45MM (24-30% growth) but Q1 is $8.5-9MM revenue with 8-8.5 Op Ex (they lump cogs with other op ex).

So…continued high level of marketing and sales + r&d expenses to help grow the top line will flatline income. Concentration is on growing Finacial Instiution clients. Hoped for 10 Fortune 500 clients in 2016; got 8. (but working with 2 of that scale in UK). Hiring sales and research folks; sales London in particular.

Some numbers to chew on…
$$MM


FY               2013   2014   2015   2016
Revenue           15     19     25.4   34.7
Gross Margin      13     17     23     31.3
Op expenses     
R&D                7      6      6      7.8
SG&A              14     16     14     19.4
Other              -      -      1      2
Total Op Ex       20     22     21     29.5

Oper Inc          -7     -5     1.8     1.8
GAAP EPS         -0.26   -0.17  0.08    0.06
Non GAAP EPS                    0.26    0.26

So while revenue is up 37% for the year; opex is up 40% led by Sales & Marketing up 69% over FY15. NonGAAP EPS for 2017 analyst average 0.278.

Cash flow from ops*$7.9 million during fiscal 2016 raising our total cash investments balance to $35.8 million at fiscal year-end.* and no debt.

Quote from conference call here: http://seekingalpha.com/article/4019150-mitek-systems-mitk-c…

Press release and numbers here (other history from Morningstar):
http://investors.miteksystems.com/releasedetail.cfm?ReleaseI…

Joe
Long MITK
Community Fool - Ticker Guide OKE, PRLB, MTZ, & SRCL
click link for my profile & holdings
http://my.fool.com/profile/CMFJambo/info.aspx

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