Saturday, August 25, 2018

PAX Global Still Facing Some Significant Issues

Although the shares are up about 15% since my last update, PAX Global (OTCPK:PXGYF) (0327.HK) remains a frustrating company and stock in many respects. The mid-teens revenue growth is certainly positive, as is the company’s relationship with fast-growing PagSeguro (PAGS) in Brazil, but management has repeatedly missed its own targets for the North American business and the Chinese business has eroded drastically. What’s more, management took a regrettable turn towards less disclosure earlier this year despite a prior pledge to be more open with shareholders.

For every positive about Pax Global, I can find a negative (and vice versa). I am concerned about the company’s lack of investment in software and services, and I do worry about the competitive threat presented by peer-to-peer payment technologies and other fintech players. But with the shares trading close to tangible book and pricing in relatively lackluster growth, there could still be an opportunity here for aggressive investors.

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PAX Global Still Facing Some Significant Issues

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