Investors Digest comment2. What the Analysts Say: Mitec Telecom
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Desjardins Securities analysts Paul Howbold and Ben Jekic continue to rate
the shares of Mitec Telecom Inc. (TSX-MTM, $2.17) a small-cap top pick with
above average risk. Their target price of $3.50 remains unchanged.
Mitec has won a contract from a digital television services provider. The
deal is worth $2.2-million. Mitec will supply switching and network
consolidation in support of the customer's network expansion.
The analysts' fiscal 2005 estimates are unchanged. Their $3.50 target price
is based on 20 times their fiscal 2005 EPS estimate of $0.16. This, they
say, "is justified by the company's internal growth prospects as well as
the potential value from future acquisitions."
Meanwhile, the company remains a small-cap top pick with net cash flow of
$25-million, growing markets and good contract flow. Risks that remain
include high customer concentration, competition and margin pressure.