Stock Quickie – MP1:ASX

Megaport – MP1:ASX

How did we get here?

Was mentioned on Buy Hold Sell: 5 of the best performing growth stocks (Livewire Markets – Youtube) and I thought I’d take my own look.

What do they do?

They service the business market,  providing network as a service. Allows for companies to be as flexible as they need through a dynamic cloud architecture with their favourite service providers.

Weighing machine

Not profitable, with RoE of about -30% for the last two years. Usually has nil debt, but this has risen to about 5% in the last year. Growth has been stellar, >50% but with some significant share dilution ~30%. Good insider ownership (10%, $200M in shares), they definitely have skin in the game. I’d classify this as a “growth company”.

Have managed to grow sales and book value rapidly since listing in 2015, cash flow is made up using share capital. 

Voting machine

They are incredibly popular, trading at a Price:Book of ~12x, vs the IT industry average of ~2x particularly popular, currently trading at about XXxPE. Historical PB fluctuates between 6-8x, so they’re at historical highs.

Other options

SLC

Worth looking further?

Not really. These guys are on a massive growth trajectory and everyone knows it. They’re valued for perfection.