2015 has turned out to be a year thatTungsten (LSE: TUNG) andMonitises(LSE: MONI) investors would rather forget. Indeed, both companieshavemade some mistakes throughout the year, and it has become apparent that the market no longer trusts Tungsten and Monitise. Year to date, Tungstens shares have lost 75% while Monitise is down 76%.
However, over the past month there have been some signs that the market is starting to trust these two companies once again. Tungsten and Monitise could be on the road to recovery.
Regaining trust
Invoicing, analytics and financing company Tungsten has continually disappointedsince its initialpublic offering in 2013.
Over the past 12months, the companys shares have lost 82% of their value as the company has consistently failed to meet the growth targets set by management. And as the companys cash balance has dwindled, earlier this year Tungsten was forced to conduct a placing to raise 17.5m.
Nearly six months on from the placing and Tungsten hasnt released much in the way of news to suggest that trading has improved. Nevertheless, the companyspreliminary results for the year ended 30 April 2015 showed that its key performance indicators were all moving in the right direction.The number of buyers using the companys electronic invoicing network jumped by 39.5% and the number of suppliers using the system increased by 7.7% to 181,000. The total value of transactions over the network ticked higher by 10% to 121bn.
Moreover, since the end of July some of Tungstens directors have taken the plunge to add to their holdings of the companys shares. So, things could be looking up for the company. Only time will tell.
Disappointing
Monitise hasnt issued any news releases during the past few months, but that doesnt mean theres nothing going on behind the scenes. Under the leadership of new CEO Elizabeth Buse, the company has been working to reduce its cost base over the past year, which should improve margins.
Further, according to the companys latest press release, Monitise is still on track to meet its goal of achieving profitability on an earnings before interest, tax, depreciation and amortization basis next year. Also, management believes that the group has enough cash on hand tofinancethe company through to break-even and beyond.
Still, Monitise has a lot to prove before the company can regain the trust of shareholders and head higher. However, investors dont have long to wait for an update on the companys progress. Monitise is scheduled to release its full-year 2015 results this Wednesday.
Unfortunately, in my opinion, Wednesdays results will be Monitises last chance to prove that it really is on the road to recovery. If the company warns on profits once again, reveals yet another surprise fundraising or lowers its outlook for growth, it could be time for investors to give up on the company. On the other hand, ifMonitise surprises to the upside, the company will be on the road to recovery.
Your own research
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Rupert Hargreaves 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.