cdaniel394, I actually do not hold a position in Orchid Island Capital, Inc. (ORC). I also haven't executed any due diligence on MiC Telematics Ltd. (MIXT). First, I am a value investor/trader. So (MIXT) does not look appealing from a value investor's perspective. Though if I was a growth investor, (MIXT) could look appealing. I probably do know enough about growth investing to pick a winning stock, but that's no guarantee.
Before I get into the fundamentals, I would like to share a personal rule of mine. (MIXT) is still in its lockup period. Lock up period is when insiders like employees, etc. and those who hold majority stake are unable to sell their shares. Usually when the lockup period expires the stock will see a dip, but not always. This could be a good entry point, though there is another reason why I like to wait until the lockup period expires. In my opinion, I feel that the lockup period gives the market enough time to set the market value of a stock. We all know how violate a stock can be after it's IPO. I prefer to stay out of this situation, personally. Another reason for this is that it gives me a quarterly earnings report during this period, which I also personally prefer. (MIXT)'s lockup period expires on Sunday, Feb. 2, 2014 which is 180 day period since IPO.
Looking for growth in (MIXT) with my fair knowledge of growth investing, I first look at the fundamentals to dissect the stock if you will. I like to get a snapshot if you will, of where a stock is in relation to it's peers. The technology sector has an average P/E ratio of 19.83. (MIXT) has a P/E ratio of 24.09 which tells us that it's a little expensive compared to it's peers in that sector. Though if we take a deeper look into the industry that it's in, we can see that it's rather cheap compared to industry peers. Technology and system software industry has an average P/E ratio of 34.45.
(MIXT)'s forward P/E ratio is much higher then its sector and industry peers with a ratio of 27.17. Typically I prefer to see a forward P/E ratio lower than it's P/E ratio, which points to future growth. Though the price you pay for growth is rather cheap compared to its sector and industry peers with a PEG ratio of 1.07. Sector PEG ratio is 1.65 and industry is 2.21 respectively. I typically like to see a stock with a PEG ratio under 1. We could get deeper into valuations if you choose, though these are the things I typically first look at. I know there is much more that we could break down in this area.
I also like to look at the financials. There are two ratios I like to look at that give me a snapshot of their balance sheet. For this, we look at the current ratio and debt/equity ratio. The current ratio tells us about their long term financial outlook. (MIXT) has a current ratio of which is 3.51, which is very good. I typically prefer a current ratio above 1, so I believe we could rest assured that they have the ability to pay off any long-term obligations. I also like to look at debt/equity ratio which is at 4.18. I prefer to see a debt/equity ratio under 1, so they could have trouble meeting any short-term financial obligations.
Other items we should look at such as the CEO, revenue, cost of goods sold (COSG), and etc. I can't seem to find the percentage of institutional investor holding, which is something else I like to see before investing. One item that sticks out with (MIXT) that worries me is the low volume. High volume means a big audience if you will, which I favor. I also notice that (MIXT) is a foreign stock from Africa. I believe the US is the best economy to invest in currently, in my opinion. Being that this is a foreign stock, could be why the volume is low. There is plenty of due diligence we can do here when looking at (MIXT). We can look further into fundamentals, financials, or even technical items when looking at the graph.
Above, when I mentioned what I look typically prefer should not be a decision breaker when deciding to invest. A stock cannot meet all of the criteria that we prefer in a growth stock or any stock for that matter. In other words, there is no perfect stock. What I look for in a growth or value stock, might be different for another investor. In conclusion on my opinion on (MIXT), I believe we could find a better stock out there.
I prefer a different strategy for finding growth, though I must warn that I have only tested it a couple of times. One with Cell Therapeutics, Inc. (CTIC) on Tuesday, Dec. 10, 2013 that I recommended to another member. You can find a link to that post at the bottom of this post. That day the stock was trading at $1.80 which is up 70% since. If you look in my past posts, you can see with proof that I did make that call. Another was Dollar General Corp. (DG) that I did not recommend that I saw at $59.07 on Thursday, Nov. 14, 2013 which is up 4% since. I don't know how emotion has played on these two stocks. Did (CTIC) have a good quarter, why is (DG) only up 4%? I believe this to be a long-term strategy, which I call best of breed. As I said before, I have not tested this strategy, I only used it in a couple of instances. I have been meaning to, but have been busy with college and working to pay for college. It is extremely important to disclose that past performance is not indicative to future results. I personally would not feel comfortable explaining this strategy. I would feel better if I had results of testing, but I do not.
I have seen many different strategies for finding the best of breed. Based on my criteria, if you wanted to invest in the technology and system software industry based on this strategy. VMware, Inc. (VMW) fits the bill. For the technology sector, IAC/InteractiveCorp. (IACI) also fits the bill, which I also saw on Thursday, Nov. 14, 2013. Then the PPS was at $58.24, today its at $72.02 almost 24%. I know this strategy goes against what I said above, but like I said before, no stock is perfect. We can't nitpick on certain things.
Thank you for reading, Gulley