International Money Express, Inc.

IMXI Details

International Money Express, Inc. (NASDAQ: IMXI) is a prominent money remittance services provider, focusing on the US to Latin America and the Caribbean (LAC) corridor. The company provides wire transfers, money orders, foreign exchange, and cash checks. It operates offline through a network of agents in different retail locations and self-operated stores around the United States and Canada and online through its app and website.

Share Repurchase Program: IMXI stated on August 18, 2021, that it has agreed to buy back up to USD 40 million of its common shares. IMXI thinks its strong liquidity position will allow it to return value to shareholders through stock repurchases. It also plans to use this liquidity to invest in accretive acquisitions and develop new goods and services.

H1FY21 Results: The company reported a 30.19% rise in total revenues to USD 211.32 million during H1FY21 (ended June 30, 2021) compared to USD 162.31 million during H1FY20, primarily due to an increase in transaction volumes driven by the growth in its agent network. In addition, IMXI witnessed an increase in net income to USD 22.20 million during H1FY21 from USD 14.67 million during H1FY20. As of June 30, 2021, its cash and cash equivalents were USD 139.72 million, and total debt amounted to USD 85.03 million.

Key Risks: The company's transactions are concentrated in a few institutions, including Wells Fargo, Bank of America, and US Bank. As a result, any change in crucial banking connections due to regulatory changes may impact the company's cash flows and operations. Further, the company's largest paying agency by volume, Elektra, contributed over 18% to its total remittance volume in FY20 (primarily from the US to Mexico). As a result, Elektra's departure might have a significant impact on the company's operations and finances.

Outlook: IMXI stated in its Q2FY21 earnings release that sales for FY21 will be between USD 441 million and USD 450 million. Its adjusted EBITDA is projected to be in the range of USD 80 million to USD 83 million, with a net income of USD 43 million to USD 45 million.

Valuation Methodology: Price/Earnings Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

IMXI Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: IMXI's share price increased by 18.62% in the past three months and is currently at the higher band of the 52-week range of USD 13.14 to USD 18.96. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is at 50.62. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 16.89. Considering the uptick in the stock price and other technical indicators, we believe the decent business fundamentals are adequately reflected at the current trading levels. Hence, we recommend a "Sell" rating on the stock at the current price of USD 17.58, down 0.28% as of September 14, 2021, 11:49 AM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

Performance Shipping Inc.

PSHG Details

Performance Shipping Inc. (NASDAQ: PSHG) is a Greece based company that provides global shipping transportation through its Aframax tankers. PSHG's current fleet is employed in the spot market under voyage charters, short-term time charters of less than 12 months, and medium-term charters of less than 36 months, with leading energy companies and traders. 

Q2FY21 Results: The company reported a YoY decline of 43.14% in voyage and time charter revenues to USD 9.12 million in Q2FY21 (ended June 30, 2021) compared to USD 16.03 million in Q2FY20. PSHG reported a net loss of USD 2.65 million in Q2FY21 vs. a net income of USD 4.64 million in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents of USD 15.01 million and total debt of USD 53.78 million.

Key Risks: As of March 04, 2021, Ms Aliki Paliou, a director of the company, owned 46.3% of PSHG's common stock, thus gaining substantial control over its operations. This constrains the ability of other shareholders to influence corporate decisions. In addition, PSHG operates in the tanker vessel industry, which is cyclical and volatile; this may lead to reductions and volatility in the charter rates and vessel values, thus negatively impacting the company's financials.

Outlook: In Q4FY21, PSHG expects spot charter rates, which are currently at low levels, to recover gradually, depending on the outcome of the COVID-19 pandemic.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

 (Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

PSHG Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: PSHG's stock price has increased 4.55% in the past month and is currently close to the lower end of its 52-week range of USD 3.98 to USD 8.80. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 54.40. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 4.61. Considering the uptick in the stock price, we believe the current price adequately reflects the business fundamentals and recommend a "Sell" rating on the stock at the current price of USD 4.96, up 1.14% as of September 14, 2021, 12:06 PM ET.

* All forecasted figures and Industry Information have been taken from REFINITIV.

* The reference data in this report has been partly sourced from REFINITIV.