Mittel Sp.A (BIT:MIT), a €138.20M small-cap, is a financial services company operating in an industry, which tends to draw the more conservative investors who attracted by their steady revenue and the above-average dividend yields. Financial services analysts are forecasting for the entire industry, a somewhat weaker growth of 3.43% in the upcoming year , and a strong near-term growth of 26.09% over the next couple of years. However, this rate came in below the growth rate of the IT stock market as a whole. Today, I’ll take you through the sector growth expectations, as well as evaluate whether Mittel is lagging or leading in the industry. See our latest analysis for Mittel
What’s the catalyst for Mittel’s sector growth?
Recently, government and overseas regulators involvement has increased to play a prominent role, closely examining and controlling day-to-day business administration of certain companies. In the previous year, the industry saw growth in the twenties, beating the IT market growth of 17.18%. Mittel lags the pack with its which indicates the company will be growing at a slower pace than its diversified financial services peers.
Is Mittel and the sector relatively cheap?
The financial services sector’s PE is currently hovering around 10.36x, lower than the rest of the IT stock market PE of 20.52x. This illustrates a somewhat under-priced sector compared to the rest of the market. Furthermore, the industry returned a higher 14.05% compared to the market’s 10.88%, making it a potentially attractive sector. On the stock-level, Mittel is trading at a PE ratio of 8.2x, which is relatively in-line with the average diversified financial services stock. In terms of returns, Mittel generated 6.14% in the past year, which is 7.92% below the diversified financial services sector.
Next Steps:
If Mittel has been on your watchlist for a while, now may not be the best time to enter into the stock. The company is a financial services industry laggard in terms of its future growth outlook, and is trading relatively in-line with its peers. If growth and mispricing are important aspects for your investment thesis, there may be better investments in the financial sector. However, before you make a decision on the stock, I suggest you look at Mittel’s fundamentals in order to build a holistic investment thesis.
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Historical Track Record: What has MIT’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Mittel? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.