Am I Brave Enough To Invest in Monitise Plc Today?


I recently decided it was time to take an outsize punt on a fast growth stock, in a bid to light a little fire in the belly of my portfolio. The company that caught my eye was mobile money specialist Monitise (LSE: MONI), which looked well placed to cash in on the rapid global growth of mobile banking, payments and ecommerce networks.

That Was Close

In the end, my nerves failed me, and I’m glad they did, because otherwise I would be nursing some hefty losses. The Monitise share price has plunged from its 52-week high of 82.75p to below 33p today. Which makes me glad I didn’t invest before, but tempted to give it a go now. 

Hot Hot Hot

When you’ve seduced markets with talk of 40% sales growth, as Monitise had, you had better deliver, because they won’t be happy with a meagre 31-33%. That confession instantly knocked 19% of its share price.

Management still hung onto its medium-term revenue growth outlook of at least 25% in 2015, and expects to turn a profit in 2016, but you know how markets hate disappointment.

Monitise rebounded in August on news of it deepening its collaboration with IBM, only to sink again in September after Visa said it was re-assessing its 5.5% stake in the company. 

That’s how it goes if you want a red-hot growth prospect. Volatility can quickly burn a hole in your portfolio.

Monitise That!

Monitise is on the move again, in the right direction this time, with the share price up 10% in the last week. That followed warm words from US billionaire Leon Cooperman, who has held onto his Monitise during its recent travails, and even tried to take Visa’s stake off its hands.

The stock enjoyed a further lift when broker Canaccord Genuity reiterated its buy recommendation, with a target price of 85p, a tempting 160% higher than today.

Rumours of a bid from IBM has further stoked the flames, and although I never like buying on takeover talk, it does add to the positive buzz around the stock.

Going Mobile

Mobile money is the future. Even old-school retail monoliths like Lloyds Banking Group are warmly embracing the digital financial future. That doesn’t make Monitise a one-way bet, rivals may steal its thunder, but given time, this stock could burn brightly.

I need a little excitement to light up the low-cost trackers I have favoured lately. At today’s discounted price, I reckon Monitise can offer that, alongside strong long-term growth prospects.

This time, I’m looking at a more moderate punt. I’m not feeling quite so brave today.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK owns shares of Monitise. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.