MONI (Monitise) caught my eye recently, because it was mentioned on Motley Fool.
Whilst I don’t necessarily think that Stockopedia’s StockRanks are perfect, when a stock scores 20 or less, it should be taken as a warning sign.
It’s momentum score is 10, with a RS6m (relative 6-month strength) of -71%. I had a look at poor momentum shares some time ago, and my conclusion was that shares in the bottom decile of momentum made poor buy candidates as a group. Although shares can switch deciles, the lowest one was the worst.
MONI has never made a profit, never paid a dividend, and the number of shares in issue has ballooned over the years. In the latest figures I’ve seen, it has net cash of £146m and a market cap of £219m. Don’t get excited about that, though, because it has issued £242m worth of debt over the last two years. Although net cash is usually seen as good, an absurd amount of cash on an AIM stock can often be regarded as a contrary indicator.
The bulletin boards are quite active on this, which is another bearish sign.
It’s also on AIM.
For fun, let’s see where the share price is in 6 months time.
Verdict: avoid, as it’s highly dangerous.
10.12p ASX 3821