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Pointer Telocation (PNTR)

Business description

Pointer Telocation is a leading provider of MRM services and products to the automotive and insurance industries. Key services are asset tracking, fleet management and monitoring goods in transit/IoT. Its main markets are Israel, Brazil, Argentina, Mexico and Europe.

Stock data

Market cap.US$104.6m
Last closeUS$12.75
High / Low (52 weeks)US$19.6 / US$10.7
Stock market listingTel Aviv Stock Exchange, US
Forecast net cash (US$m)4.3
Forecast gearing ratio (%)N/A
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual(11.5)(20.8)5.8
Relative *(13)(22.2)(6)

* % Relative to local index

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Company news

Y/E Dec Revenue (US$m) EBITDA (US$m) PBT (US$m) EPS (fd) (c) P/E (x) P/CF (x)
2016A 64.4 9.8 6.6 81.1 15.7 7.7
2017A 78.2 13.9 10.4 116.0 11.0 10.1
2018E 83.6 14.4 10.4 113.3 11.3 9.7
2019E 94.0 16.6 12.4 133.4 9.6 8.2

Last updated on 30/05/2018

Investment summary

Pointer Telocation has announced a new collaboration with Microsoft Israel to create an AI-powered driver monitoring and prediction tool. We see the potential for this to give Pointer an important edge in the driver monitoring space in which it is already competing strongly. Q118 results showed a recovery in product sales from Q4 (up 29% q-o-q), but only 5.6% y-o-y growth arising from low demand for non-LTE enabled devices and Latin American (Latam) currency declines. Nevertheless, the group continued to deliver on local currency service revenues, margin gains and cash flow generation but, with Latam currencies continuing to weaken in Q2, despite expected boosts to sales later in the year, we have trimmed our current year EBITDA and EPS forecasts by 10% and 22%, respectively giving rise to a peer-based valuation of $19.1/NIS68.3, and DCF value of $18.1/share or NIS64.6/share.

Last updated on 29/05/2018

Industry outlook

The global telematics market (services and products) is forecast to grow at an 18.9% CAGR between 2015 and 2020 according to Driscoll & Associates, reflecting the growing sophistication and integration of telematics devices into business frameworks and increasing legislation requiring the use of telematics. Less developed markets such as Latin America and Africa are forecast to achieve higher CAGRs of 15.6% and 17.3%, respectively, during this period.

Last updated on 27/04/2018

Key management

David Mahlab, CEO
Zvi Fried, CFO

Company address

4 Hamelacha Street,
Rosh Ha’ayin
48091
Israel
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