MiX Telematics (MIXT 4.37, +0.33, +8.17%) is a name that is not on a lot of people’s radar
but the stock has more than doubled over the past year and is worth a look.
MIXT is based in South Africa and a provider of cloud software-based fleet and
mobile asset management systems. Real-time visibility into vehicle location and
driver performance is critical to managing a safe, efficient fleet.
MIXT offers a wide variety of services: For fleet efficiency, MIXT offers vehicle tracking and analysis, fuel consumption and mileage analysis; for regulatory compliance, it offers compliance monitoring, hours of service tracking and fuel tax reporting; for driver improvement, MIXT offers in-vehicle video monitoring and in-cab real-time driver feedback; for risk management, it offers driver scoring and analysis and journey management; and for safety and security, it offers vehicle and asset tracking, crash notifications and vehicle theft recovery. Its software is designed to provide customers with business intelligence on demand.
In some developing countries, high crime rates have resulted in automotive insurance mandates requiring vehicle tracking. Many companies still use legacy (spreadsheets) and paper systems which are labor intensive, prone to error and are not in real time. Also, because of the limited functionality of legacy systems beyond basic location-based tracking, this makes it difficult for fleet operators to fully benefit from the cost savings and efficiency improvements associated with more robust fleet management offerings.
MIXT believes its market is large, growing, and under-penetrated. It's not just for commercial fleets, MIXT also sees a large and under-penetrated market to provide a tailored set of safety and security offerings for passenger vehicles. MIXT currently provides tracking services on more than 676,000 assets with customers ranging from small fleet operators and consumers to large enterprise fleets with 10,000+ subscribers.
By geography, revenue in FY18 broke down as follows: Africa (56%), Middle East & Australasia (16%), Americas (13%), Europe (11%), Brazil (3%). With it being based in South Africa, that is where it gets the majority of its revenue.
The stock jumped on May 10 when MIXT reported strong Q4 (Mar) results. Subscription revenue of US$31.6 mln, rose 19.4% year/year and 4.1% sequentially. Probably the standout metric with MIXT is its adjusted EBITDA margin, which improved to 28.7% in MarQ, up from 25.9% in DecQ. MIXT has a long term goal of 30% margins.
In sum, fleet management is a big trend in the industry. It's not only for security, but also provides a real time overview of a company's assets. This information can be used to make a company more efficient and boost margins. It also allows companies to be more strategic in terms of the deployment of their assets. The high international exposure does result in some risk here and makes the name somewhat speculative but still worth looking at.
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