Will Monitise Plc, Blinkx Plc And Zytronic PLC Smash The Index In 2016?

It’s been another difficult week for mobile payment solutions provider Monitise (LSE: MONI), with the company announcing that its CFO has resigned with immediate effect. Following the news, Monitise’s shares fell by 7%, with it coming just a couple of months after the company’s CEO stepped down from her role.

Clearly, Monitise is not the most stable of companies and things appear to be going from bad to worse. Its share price has now fallen by 90% since the start of 2015 and, realistically, it would be unsurprising if further falls took place before the end of the year and into 2016.

That’s because Monitise is still struggling to convince investors that it has a viable business which can turn a consistent profit. Until it does so, it appears as though there are much better options elsewhere – especially since the mobile payments arena is becoming increasingly competitive and is rapidly evolving.

Another company which has endured a tough 2015 is online advertising specialist Blinkx (LSE: BLNX). Its shares have fallen by 12% since the turn of the year, although this is a much better performance than the 87% by which they collapsed in 2014. That was mainly due to the business making a loss of $25m in the 2015 financial year as it shifted its strategy from desktop to mobile.

Of course, the changes which Blinkx has made to its business appear to be logical, with it reorganising its product offering and making multiple acquisitions using the generous cash pile on its balance sheet. Despite this, Blinkx is expected to remain in loss-making territory throughout the current financial year and into financial year 2017, with pretax losses of $23m and $13m respectively due to be recorded.

As with Monitise, investors in Blinkx appear to be demanding profitability and until this is delivered it seems unlikely that investor sentiment will markedly improve. In other words, an improved strategy may have slowed the fall of Blinkx’s valuation and bought it more time, but it now needs to deliver. However, with a vast improvement seemingly unlikely, 2016 could be more of the same in terms of a disappointing share price performance for Blinkx.

Meanwhile, touchscreen manufacturer Zytronic (LSE: ZYT) has enjoyed a very prosperous 2015, with the company set to deliver an increase in its bottom line of 21%. As such, its shares have risen by 26% since the turn of the year and, looking ahead to next year, more growth could be on the cards since Zytronic is forecast to increase its net profit by 8%.

Although Zytronic trades on a forward price to earnings (P/E) ratio of 15, it still appears to offer good value for money when its track record is taken into account. For example, in the last four years it has been able to increase earnings at an annualised rate of 7% and, with a niche product in a growing industry, it appears to be well-positioned to continue its excellent run of growing profitability. And, with Zytronic yielding 3.1% from a dividend which is covered twice by profit, it is a relatively appealing small-cap income play, too.

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Peter Stephens owns shares of Zytronic. 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.