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MP1 - Megaport Limited

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all time high

Monday night's Global update laid the foundations
Wednesday's Full Year Result pushed it higher:
Growth in Ports, Services, and Revenue



Revenue $58.0M up 66%
Profit after direct network costs of $29.5M improved by $17.6M
Profit after direct network cost margin of 51% improved from 34% in FY19
Normalised EBITDA loss of $19.9M, 34% of revenue (FY19: 70% of revenue)




(Hold; free carry) (x7 bags)
 
Late June, Megaport added to the S&P/ASX200 Index, and the broker chatter lifts..... as well as the July comments (above), then in August: and in September - not that all of that means a hill of beans, but grist to the mill.
 
don't meet lofty (unrealistic?) expectations, and what happens?

Megaport has reported a strong increase in product uptake and customers through the first quarter of the year. Quarterly new ports rose 10 per cent quarter on quarter with 138 new customers added, an increase of 7 per cent. Both were record quarterly increases. North America was the strongest contributor, responding for 63 per cent of growth in new customers and 58 per cent of new ports.
 
Dona Ferentes said:
don't meet lofty (unrealistic?) expectations, and what happens?

...
Click to expand...
Megaport reports solid quarterly growth with underlying Monthly Recurring Revenue 1 up 10% and reported Monthly Recurring Revenue up 8% QoQ. Total Services were up 6%, and Megaport Cloud Router up 11% in 2Q FY21.
- these are modest numbers.

- running to stand still?



( still HOLD/ FC. last sale at $15.12)
 
1HFY21 Financial Highlights
● The Company’s revenue for the half-year period ended 31 December 2020 was $36.0M, an increase of $10.1M or 39% from the same period ended 31 December 2019.
● Monthly Recurring Revenue (MRR) for the month of December 2020 was $6.3M, an increase of $1.7M or 37% from December 2019.
● The business generated a profit after direct network costs of $18.2M for the half-year period ended 31 December 2020, an increase of $5.1M or 38% from the same period ended 31 December 2019 ($13.2M).
● Net loss for the half-year period ended 31 December 2020 was $38.4M.
● At 31 December 2020, the Company’s cash position was $144.2M
As of the second quarter of Fiscal Year 2021, all three of our operating regions are EBITDA positive. This puts us on track to achieve our goal of Group EBITDA break even on a run rate basis within Fiscal Year 2021.
Click to expand...
 
Ignoring the Covid dive, would it be fair to say the 18 month trend of higher highs has reversed as the rotation from growth / tech into value has been well and truly established.



(Still HOLD, but as a free carry)
 
Thats true, as long we remember that this is a rotational play that started at the turn of the year. Does not mean we should throw the MP1 and NXT type stocks out the window, at least not in my opinion.
 
Volume isn't picking up which I guess is a plus but pretty ominous looking chart. Shouldn't have broken strong support around $12. 'Retested' $12. Makes me think of a head and shoulders and the conventional measured target for that would be around March Covid low. Anyway, doubt that anyone chart based would be buying it.
 
retesting $12 . again. but this time through +4%

Nice warm and fuzzy letter to shareholders (performed as we should during Covid)
Update: mid single digits

Outlook : great team, etc. Fiscal Year 2021 has highlighted the strong operating leverage in our business model and we remain on track to achieving EBITDA breakeven, on a run rate basis, by June 2021.
 
the last 6 days have been green, and 20% lift with very little retracement during the run

 
Megaport’s valuation does look frothy. The market cap is more than $2 billion, yet over H1 FY 2021 it more than doubled its net loss to $38.4 million on revenue of just $36 million. This is attracted the shorters; a significant 8.1 per cent of Megaport’s shares, worth about $166 million, are still short sold.

Bevan Slattery took to corporate soapbox LinkedIn earlier this month to taunt a trader betting on share price falls for Slattery’s latest sharemarket venture, Megaport. Slattery reckons the trader short sold 11 million shares only to watch the price rise. He also stated that over a single day recently, he fielded and rejected four calls from investment bankers and brokers asking if he might consider selling some shares, presumably, to help his short-selling enemies cover their positions.
 
and he might have won this round.... from $13 some seven days ago, there has been a rise each day since, to cross through $15 a share today.
 
MP1 closed at $17.60 which is an ATH. Only 5 down days in last 5 weeks.
 
still pushing higher; has hit $18.27 ... up 5% today (actually just 3.5% to a new high ; but the general market is down nearly 2%)

there have not been any Change of Significant Holdings since March, when MUFG lodged
 
Dona Ferentes said:
still pushing higher; has hit $18.27
Click to expand...
and down a buck, in the last 2 days
Dona Ferentes said:
there have not been any Change of Significant Holdings since March, when MUFG lodged
Click to expand...

...there was an AFR item, about an early investor selling out, which is probably enough to knock the price around for a while
The seller is a subsidiary of NYSE listed data centre services business Digital Reality, Digital MP LLC, which
first declared a substantial shareholding in December 2017, when Megaport shares were trading at about $2.50 each. Its large selldown last year came at a price of $13.35 per share, generating $100 million.
Click to expand...
 
It has seemed to me that a lot of stocks that were performing strongly in fy21 have been taking a knock. So it could be the inverse of eofy selling of weak stocks to rack up the cgt loss. Selling now forestalls the tax payment for well over a year. I have been hanging out for the new financial year myself for the liberty of selling down a couple of high performers (CHN, CDA) to build cash but it looks like others got in ahead of me.
 
last four weeks for MP1 have seen solid buying, usually driven by bots. From around $16 at start of Oct, today it has reached an all-time high of $19.30

(and a nine and a half bagger for me)
 
MP1 listed late 2015 at $2 a share, and Megaport has closed above $20 for the last two sessions ... even made it to $20.88 before the close of $20.38

I am going to claim it as a Ten Bagger, and a free carry at that; since getting interested, and buying in:
3,200 at 3.27 on 09 Feb 2016
1,800 at 2.50 on 08 Mar 2016
4,264 at 1.70 in SPP on 22 Aug '16 plus a top-up to bring it to 5k

For once, the folly of averaging down has paid off, as the next buys, both SPPs, were at 3.75 and 4.00 in 2018 and 2019, then the last SPP in Apr 2020 at 9.50. A feature has been that all four SPPs have been heavily scaled back. Sold a few in Aug '19 at 7.90 and again before last SPP at 10.97. Last sale was Aug last year at 15.12. All up, I've put in $38K in 6 buys and taken off $49.5K in three sales.

- still don't entirely know how the company does what it does,
 
Reactions: bk1
Dona Ferentes said:
MP1 cruising through $11
Click to expand...
but couldn't make it to $22.01. Hit the even dollar number 7 times today, but not cent more. Nevertheless the retreat was only a coupl'a cents. Closed 3% up for the day at $21.88
bk1 said:
Thats true, as long we remember that this is a rotational play that started at the turn of the year. Does not mean we should throw the MP1 and NXT type stocks out the window, at least not in my opinion.
Click to expand...
wise words, from late March .... Yes yes and yes. basically you called the base, @bk1 . the rotation rerotated/ derotated/ twisted off, and since then it's been upward and onward

(NXT is basically a REIT, to me)
 
I sense some consolidation, M&A activity coming soon to the sector.
Not necessarily MP1....
 
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