What: Shares in ASX-listed telecommunications company My Net Fone Limited (ASX: MNF) soared by almost 10% yesterday. Consequently, the ASX issued the company with a speeding ticket, however the company stated it was not aware of an explanation for the surge in share price. Investors in My Net Fone have been extremely well rewarded over the past 12 months as the company's share price has increased from $1.09 to $2.44.
So what: My Net Fone owns and operates Australia's largest Voice Over Internet Protocol (VOIP) network in Australia, carrying more than 3 billion billed voice minutes annually. The company has grown strongly over the past few years and has operated profitability since 2009. For the first half of FY14, the company grew net profit by an impressive 44%. The company has forecast full-year FY14 net profit to be 34% higher than the previous year, demonstrating the large growth the company is currently experiencing.
Now what? My Net Fone is an impressive long-term growth story and appears to have a bright future. Although the shares trade on a relatively high price earnings ratio of 30 times, given the high growth rate of the company, the current share price is not expensive and would be a good entry point for long-term investors.
Investors looking for further exposure in the telecommunication sector should look away from Telstra Corporation Ltd (ASX: TLS) and towards smaller companies such as M2 Group Ltd (ASX: MTU) which is growing earnings at a rapid rate and the shares appear cheap at the current price, especially when compared to Telstra.
