Ann: Quarterly Investor Update, page-31

NIce buying. Morgans reports as undervalued today.

Morgans rates MSV as Add (1)-

And now for that eternally present, but never resolved riddle: whyare Mitchell Services shares constantly trading at a noticeable discountvis-a-vis peers?

Stockbroker Morgans adds this is once again the case, despite a"very strong" looking outlook for the drilling services provider. Thebroker also points out there might be a suitor appearing at some stage, giventhat steep valuation discount.

Rating: Speculative Buy, with M&A upside potential. Target$0.66.

And now for that question: why the persistent discount?

Morgans offers a few possible explanations, beginning with thecompany's relatively smaller size while low liquidity likelyrestricts institutional investor interest. But also: the SMSdispute possibly raised concerns about potential inter-relatedtransactions.

However, company management's recent preferencing of growthover shareholder returns aligns with the motivations of micro-cap investors andis a less plausible driver of the discount, in Morgans' view.

Target price is $0.66 Current Price is $0.37 Difference: $0.29
If MSV meets the Morgans target it will returnapproximately 78% (excluding dividends, fees andcharges).