m2 recognised

Hi,

Interesting articles out today.

Art 1-M2 a buy

Art 2 - Perhaps explains the recent share price dip with one fund seizing on the opportunity for price dislocation in the market - realising M2 gains and putting money into other stocks. And still a buy.



Article 1:

A good business getting better

The market?s reaction to M2 Telecommunications? (ASX: MTU) earnings piqued my interest. M2 nailed earnings, but revenue disappointed.

With M2 down 6% after earnings, it appears investors are looking at a glass half empty. The sluggish revenue growth masks the quality of earnings.

The market appears to be focusing on the revenue miss and low revenue guidance. I think the market is wrong, and is underestimating the strength and quality of M2?s earnings.

M2 blew away my earnings and dividend expectations ? up 52% and 80% respectively. The low revenue guidance is due to the elimination of low wholesale margin business ? so no big deal.

Operational efficiencies drove the excellent earnings in 2011 ? that?s a big positive. Further business improvements are expected to increase EBITDA margins by 33% in 2012. I see a good business getting better.

http://www.fool.com.au/investing/2-cheap-stocks-you-can-buy-today

Article 2:

Microequities Deep Value Microcap Fund

Pricing dislocation during the month of August provided our Fund with some outstanding opportunities to refine our Fund?s composition. The Fund sold its positions in Kresta Holdings Ltd (ASX:KRS) and M2 Telecommunications (ASX:MTU). The Fund has owned both of these businesses since inception, and while we remain positive on both of these businesses.

On that particular note, I would like to make special mention of M2, which has provided its shareholders with a formidable return over the past few years. The company?s superb management team has seen a focused approach to all its key stakeholders; Its staff by providing a rich and dynamic place to work in, its customers by providing them with a service centric price competitive offering and lastly its shareholders by never losing sight of the basic directive; generating wealth for its equity holders. The fund has added a new position in a business with a strong barrier to entry, trading at around 18% earnings yield and on a dividend yield above 10%. With a return to growth in FY11, the business is well poised to continue its expansion into FY12.