is any getting excited !, page-10

Hi,

I agree MTU in not much undervalued at current prices and it may be appropriate on an individual basis to take some profits. However Bowen has confirmed they remain on track, are well positioned for NBN AND are currently considering some bolt on acquisitions.

Cornish also has significant contacts in the telco sector and one has to suspect he sees value in MTU even at current prices with him only recently increasing to a 6% holding.

So in my view I don't believe the dream run has ended yet.

Refer also Dean Morel's comments -
http://www.fusioninvesting.com/

I attended the M2 Telecommunications AGM yesterday afternoon. I had a couple questions to ask, but before I could Vaughan Bowen addressed them all in his CEO presentation. M2 well positioned for the NBN roll-out, with an organisation built around the low margins of a re-seller. Speaking of margins Bowen REAFFIRMED GUIDANCE and made it clear they would enjoy MARGIN EXPANSION this year. While that was obvious from their guidance of earnings expanding faster than revenue, it was good to hear that their focus is on profitability. I think that is a distinction that many CEOs fail to really internalise.

MTU?s Net Profit Margin over the last five years show that they have room to grow from 2010?s 4%; 2005 -2010 7.67%, 6.56%, 5.52%, 4.73%, 3.69% and 3.98% in 2010.

Bowen made it clear that M2 value their employees and are proud of the $1M per employee they generate. Many senior executives fail to truly appreciate the real value of their companies doesn?t appear on the balance sheet, it walks out the door each day. Bowen clearly gets it. In other MTU news the Cornish Group increased their ownership and now own 6.09% of M2. MTU currently sits in my valuation sell zone, yet I?m going to continue to hold as my admiration of Bowen and his team continues to grow. They could be one of the winners from the NBN transformation

SD