Coms plc (LON:COMS) has had a wild ride on the London markets over the past few days, rising by more than 270% since since last Friday, when the Internet-based telephony provider announced in a press statement that it had “signed a contract to sell broadband and lines to an outsourcing company with turnover of over £2.0 billion,” though the client company has not been named.
According to its release, Coms plc (LON:COMS) expects the contract to be worth at least £15 million for the next two years, and CEO Dave Breith said that, “represents our largest contract win to date,” adding that it will feature Coms’s “scale capabilities across different product lines.”
With this news in mind, then, it’s worth taking a look at what shares of Coms may be worth, and from a book value standpoint, it’s not particularly cheap. Coms trades at 2.8 times its book, above its five-year historical average of 0.7–which is a moot figure, since the sheer size of the company’s new contract materially changes its valuation.
More pertinently, Coms is more expensive than some of its peers in the telecom services industry, like Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT), and NTT DOCOMO INC COM SHS NPV (LON:NDCM), for example.
From a growth standpoint, though, Coms plc (LON:COMS) is rather cheap, trading at a PEG of a mere 0.02, below its 2011 (0.05) and 2010 (0.03) levels, and with £2.97 million in revenues last year, a new contract worth an average of £7.5 million a year will be a massive growth driver. Still, the valuation after its recent gains is a bit of a concern, and it’s difficult for any investor to think there’s any value to be had after a massive double-digit percentage gain, at least in the short-term.
It’s difficult to gather extensive information on hedge fund interest in Coms, due to the fact that it’s not a U.S.-traded equity, and thus, shareholders are not required by the SEC to disclose their positions quarterly. Still, with a bit of digging, we found that according to 4-traders
, London-based MXC Capital Limited dumped its entire interest in the stock earlier this year.
Clearly, one factor that could aid Coms’s shares further is a clearer I.D. of its client company, though it’s pointless to speculate at the moment. For more information, check back here for any updates, as a timely reveal of the “client” could give ardent investors a jump on their peers.
One of Coms plc (LON:COMS) biggest innovations is its Bria software for Apple Inc. (NASDAQ:AAPL) Mac and Microsoft Corporation (NASDAQ:MSFT) Windows operating systems. For the sake of brevity, we’ll share this brief “How-To” video about the service, and it’s quite possible that this could give investors yet another reason to be bullish sooner rather than later:
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