MTU HAS A VERY ACHIEVABLE PRICE TARGET OF BETWEEN $3.00 (P/E 14)...

MTU HAS A VERY ACHIEVABLE PRICE TARGET OF BETWEEN $3.00 (P/E 14) and $4.00 (P/E 20) in 2011.

Now just to make things a little more exciting...If you remember M2 is so confident of the future that in its August results report it predicted 2010 results (link at bottom). M2 has a seven year track record of meeting AND exceeding expectations!

In the recent Intersuisse report (link below)analyst Petter Russell noted that M2 was a STRONG buy and that "The
global financial crisis appears to have passed MTU by, save that it no doubt widened the door to its opportunities to acquire both People Telecom Limited
(PEO) and the small and medium business (SMB) assets and related IP of Commander Communications Limited (CDR) late in the period"

It is also "amongst the largest customers of both Telstra and Optus....well placed for the shakeup with Telstra needing strong parners to win the battle!

Now keeping with the PE ratio discussion (expansion and underlying earnings growth). If you look to predictions for earning in 2011 (table from Intersuisse report below)....then with earnings at 21c/share....and market P/E pricing for M2 historicaly between 14 and 20 while a much smaller company (20 August 2008 - Global FC came along but the business grew!) and competitors at higher P/Es you start to get the picture!

MTU HAS A VERY ACHIEVABLE PRICE TARGET OF BETWEEN $3.00 (P/E 14) and $4.00 (P/E 20) in 2011.

Hold the line for short, medium and long term capital appreciation AND dividends - a read diamond!

Investment Fundamentals
Year-end Jun FY08A FY09A FY10E FY11E
Revenue ($m) 109 203 385 481
EBITDA ($m) 9.1 13.3 30.0 40.5
EBIT ($m) 7.8 11.6 23.9 34.9
NPAT ($m) 5.4 7.9 15.5 23.4
EPS (¢) 6.7 9.4 14.0 21.0
EPS Growth (%) 67.5 40.3 48.9 50.0
PE Ratio (x) 14.8 10.5 7.1 4.7
Dividend (¢) 5.0 5.5 9.5 14.5
Franking (%) 100 100 100 100
Dividend Yield 5.1 5.6 9.6 14.6

Intersuisse report:
http://m2.com.au/docs/investor/M2%20Telecommunications%20Group%20-%20Intersuisse%20-%2027%20August%202009.pdf

M2 presentation August results:
http://asx.com.au/asxpdf/20090827/pdf/31kc03llqsgc6v.pdf

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