MONITISE PLC ORD GBP0.01 (OTCMKTS:MONIF) Could Be In for An Upswing

MONITISE PLC ORD GBP0.01 (OTCMKTS:MONIF) traded all the way up to $0.057 in April, but now goes for just $0.037. There's been no real news hit press, so the decline might be an opportunity to get in at a circa 35% discount ahead of an earnings driven recovery. There are a few key points to look out for when the company reports its next numbers – here's what’s important.First, a quick introduction. Monitise is a UK based company with a focus on cloud based mobile financial services. The way it promotes its services is jargon to those not closely associated with the space, but to simplify, it builds the infrastructure that underpins things like mobile banking applications, transfer technology etc., and then basically white labels it to banks.One of the great things about the company is its presence. It’s worked with, or is working with, nearly all the major financial institutions in the Americas and Europe; you name it, Monitise has worked with it – Bank of America Corp (NYSE:BAC, Royal Bank of Scotland Group PLC (NYSE:RBS), BNP Paribas SA (ADR) (OTCMKTS:BNPQY) to name just three highlights.Financials have dipped over the last couple of reporting periods, but this is primarily due to an ongoing restructuring effort, as opposed to loss of customers. The company soared back in March on news that it was in the early stages of discussions to offload the content arm of its operations, Markco Media, but as yet there's been no confirmation of a sale. As mentioned, this comes as part of a wider restructuring effort, whereby the company is shifting focus to its core operations. In the first half of fiscal 2016 (the 6 months to December 31, 2015) Monitise's head count cut from 850 to 646. By end February this year, it was at 545. It's now around 300.This downsizing activity translates to some pretty solid financials. The company expects to report a finished 2016 H2 (end June, 2016) at pretty much the same cash balance it started with – £53 million – and won't have needed to raise any capital during the period, so no dilution. Further, this cash balance just about outweighs the company's current market cap, and the restructuring efforts should have delivered net benefit of circa £3 million per month for the last six months.So what's the downside? Well, if the sale of Marckco Media falls through, chances are we'll see a sell off purely based on sentiment. Markets are pricing this potential sale into the company's current market capitalization even though there's been no word on its status for a few months, and sell the fact could quickly come into play if things don't turn out as rumored.There's also the potential for a quantitative driven hit come H2 2016 results release. The data is expected to hit press sometime late August early September, and restructuring is all well and good, so long as the company can deliver on its expectations that the restructuring will translate to better margins. If it can demonstrate its meeting of these expectations in the next release, there's every chance we will see a sentiment reversal and some closing of the slide seen since April. If not, chances are we will see a continuation of the current trend.Bottom line on this one is that this is a strong, established company with hundreds of full time employees and big name customers across the globe. Revenues have slipped on restructuring, but we believe there's plenty of room for upside in its market capitalization once the numbers start to stabilize. We're going to be watching things carefully.To get our interpretation as soon as the data hits, and for updates on MONIF, sign up to our free newsletter below.Disclosure: We have no position in MONIF and have not been compensated for this article.