Acuity Ads moves it's Head Office and Moves up in Style

    Acuity Ads(AT) has been in Halifax for some time.It was an old style advertising company.But it has gone into the online advertising business in a big way.It released it's Q1 2021 results on November12 and the results were good but investors have moved the stock price from $2 to $7.75 and the market capitalization from $75 million  to $360 million for other reasons.This blog recommended in a blog on Wordpress (Blogdaleup) on October 30,2019 to meet with and combine with 3 junior online advertising  companies namely,Unbounce,Sortables and Scribbles Live.And the stock price went from $2 to $7.75 in 2020;and the market capitalization from $75 million to $360 million.As AT has much more potential for growth now.Is it possible that there is room for another small acquisition?Well in November AT raised $20 million in equity with 3.5 million shares at $6.10 which is well above their $2 share price in January of 2020.Acuity Ads has bounced back with style.

      Q3 Highlights

   This was not a hugely successful quarter but it was an improvement over Q1 in 2020.Revenues were $26 million for a 3% decrease over 2019.Acuity Ads management says the decrease was because of the pandemic.However their gross profit margin increased from 48% in 2019 to 52%.And adjusted EBITDA increased 150% from $1.6 million  in 2019 to $4 million.While net income was $1.9 million compared to a net loss of $1.4 million in Q3 2019.

    Nine Months

    AT  had a good Q3 but performance was good for the entire 9 month period.This blog believes it's the change in structure caused partly by the new acquisitions that buoyed the financial results.For example,TV revenues increased by 353% over Q3 of 2019.And it launched a self-serve platform that will contribute to Q4 revenues.   Consequently adjusted EBITDA was $8 million  for 9 months compared to $3.7 million for 2019 for a 115% increase. And there was a net loss of $.5 million compared to a net loss of $7.6 million in 2019.                                 

     Consolidation

  This blog believes that all 3 of the proposed small tech. companies should be acquired because all 3 have specialized talents in online advertising operations.AT's recent increase in share price makes it easier to raise the cash required to do so.But all 3 must be merged in a way that is most efficient.Once this is done this blog sees the possibility for AT's price to move from it's present price range to the $13-$15 price range.It still will have a long way to go to catch up to other online technology companies like Mediagrif.But with Acuity Ad's new platform some of these second tier companies are within range.               https://www.zacks.com

Fortuna Silver makes free cash flow in Q3 equal to 9 months of 2019

 On November 12 Fortuna Silver Mines released it's third quarter results. Fortuna is a well diversified gold and silver miner with mines in Peru,Mexico and Argentina.And  for this quarter the CEO said " we have reported a record breaking quarter in sales and free cash flow".Sales of $83 million in the quarter compared to $61 million for Q3 in 2019.Net income of $13 million compared to $8 million in 2019.More importantly adjusted EBITDA was$42 million versus $19 million in 2019.In fact,Q3 adjusted EBITDA for 2020 was 60% of total adjusted EBITDA for 9 months of 2019.However the big story was free cash flow.FVI generated free cash flow of $30 million for Q3 in comparison to $10 million in Q3 2019.While the $30 million compared to $28 million for the 9 months of 2019.This allows for a small dividend if this performance continues in  Q4.

     Production  Constraints

           The pandemic did have an affect on Fortuna Silver as mine production was closed for 5-6 weeks.Consequently mine production went from 796,000 tonnes to 662,000 tonnes.So silver and gold production for 9 months was down from 2019.However the increase in price helped to compensate for the drop in production;the price of silver went from $16 /ounce to $20/ounce in the first 9 months and $25/ounce for Q3.While the gold price went from $1365/ounce to $1752/ounce for 9 months and $1921/ounce for Q3.At the same time FVI reports they are mining higher grades of both silver and gold.

      The Lindero Mine

      Lindero is a mine in Argentina and FVI has been developing it since 2017.Their total capital expenditures on development will be about $325 million before production begins.And production is expected in the first quarter of 2021.Full production will be 18,750 tonnes per day and a high grade of silver and gold is expected.This is a substantial sized mill.However Fortuna does not estimate how much total production will be enhanced in Q1 2021 nor for 2021 by their Lindero production.But a rough estimate would be by 5% in Q1 and 20%-25% for 2021 assuming the grades are the same as in their other mines.                

       Price Movement 

    Fortuna has traded in the $8-$9 price range since July.And in November it hit a high of $10 but has fallen off to the $8.50 recently.Management expected the healthy third quarter report could send it back up to $10 and quite a few analysts expect FVI to go to the $10-$11 area.This blog expects that production for Q4 will be flat compared to Q3 production.But the price of silver and gold should be up from present levels and from the average price for Q3.This could easily bring the price up to the $10.50-$11.00 area.If this blog is right and production for the Lindero mine comes in as expected then look for the price to nibble on $12 a share in Q1 2021. 

                     
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Sangoma Technology still has Lots of cash from Equity Issue

On October 20 Sangoma Technology (STC) released it's Q4 and annual report and it did not fail to please it's shareholders.Annual revenues were up 20% to $131 million and EBITDA was up to $22 million which was a STC record.It also gave guidance for the next fiscal year.

    Annual Highlights

  Sangoma Technology had a good year.Probably the biggest highlight was an $80 million equity issue which is phenomenal for a company that had a market capitalization of less than $300 million at the time.This shows tremenduous investor confidence.And STC did not let it's shareholders down.Annual revenue was a record at $131 million;EBITDA exceeded guidance at $21.6 million or up 75%.Net income,at $4 million was double that of 2019.

       STC gives guidance for 2021 revenues of $143-$147 million.EBITDA,they say, will be between $24-$26 million.Sangoma will be consolidating  all the changes and mergers made in 2018 and 2019.                  

     What About the Cash?

  Sangoma says that it has a cash balance of $27 million.This is just a little more than their working capital needs.But they also report that they still have $76 million proceeds left from their $80 million equity issue.STC gives guidance for next year of $143-$147 million revenue and adjusted EBITDA of $24-$26 million.Both figures are about 10% ahead of this year.This is steady growth but investors are looking for sales growth similar to this year (16%).At the same time this blog sees that Sangoma needs time to consolidate properly it's recent acquisitions.So as to make their operation run smoothly.But it has enough cash to both invest in improvements in their present operation and put money into future growth.This blog suggests that it take a significant stake in Counterpath Solutions which only has a market capitalization of $27 million.It can run as a separate independent operation with more STC cash used for working capital.At the same time this covers Sangoma eventually moving into software to accompany their primarily hardware operation (with some software sales).       

www.motleyfool.com   www.moneysense.ca 

Vecima Networks beefs up Finances for Annual Report

     Vecima Networks(VCM)  is based in Victoria,B.C. and transforms cable television signals into compatible modems and internet compatible devices.This is called video streaming.VCM has been around for about 5 years but has only in 2020 become profitable.It reported a net loss and net loss per share in 2018 and 2019.But it picked up  in the second quarter a large new Saskatchewan cable company customer in 2020 called Access Communications as well as a Tier 1operator called APAC with 5 million subscribers.And now it is showing positive adjusted EBITDA as well as e.p.s. in 2020.In addition, it has a new contract with another customer in October called Midco.Midco has 440,000 customers in 400 communities, with an average size of 1000 people, in mid-western U.S.A.VCM is hoping  these 3 contracts will beef up earnings for the fourth quarter and annual report due on November12.

           Technological Improvements

    Of my 2 websites on Google Blogger this site,Workathon,covers the more technical companies.Vecima's base of customers is in rural areas where they cannot receive ordinary cable television service.VCM has video streaming equipment that transforms video signals and related signals in the cable television system into signals compatible with television and internet devices.This is a considerable improvement over the limited reception available before HDMI (video streaming) equipment.In my blog on Workathon dated July 30,2020 it was suggested that revenues could be increased if a small subscriber fee could be charged by VCM.     

          The Fourth Quarter

   VCM's next quarterly report will be on November12 and this blog sees improved financial performance.Adjusted EBITDA was $20 million for 9 months and $6 million for the third quarter.While e.p.s. was $.33 for 9 months and $.03 for Q3.VCM does not give annual guidance but this blog's estimate for the year is $27-$30 million for adjusted EBITDA and $.36-$.40 e.p.s.This makes for a P/E ratio of 32-35 times earnings which is only high if VCM cannot find new customers or new applications.My blog on Workaton dated July30 stated that" the stock price could be $13-$14 by yearend." It also stated that "revenues and earnings will not likely improve until 2021."Now it appears that revenues will increase in 2020 but will the margin on sales?So VCM is now slightly ahead of this blog's July estimate but can it meet the estimates of adjusted EBITDA and e.p.s given above?If so then advancing to the $14-$15 area by year end seems to be a quite good forecast.         https://www.moneysense.ca/ https://www.zacks.com/

BTB Reit weathers the Storm but cuts Dividend

BTB Reit is a small but well managed reit mostly located in Quebec and eastern Ontario.It just reported it's second quarter results and they were lukewarm.Revenues grew by 3% or from $22.4 million to $23.1 million.This includes a loss of $.5 million resulting from the government program.Net Onsite Income grew 2% or from $12.2 to $12.4 million.Yet it had a net loss of 7% over Q2 2020.BTB tells shareholders that rent recovery was at 97% with rent deferrals being8% of the total collected.Surprisingly the occupancy rate went from 92.9% to 93.1% in these tough times.Furthermore the decrease in total debt  ratio went from 61.4 to 58.6%.So,in summary,solid management and a slight pick up in revenues has allowed BTB Reit to weather the storm but it felt that it had to cut it's dividend from $.035 to$.025 per month.This blog feels that this was the prudent thing to do as there will be capital left for organic growth.

    BTB has been active in 2020.It sold 5 properties and made gains on the 5.And it also made 4 acquisitions.Michel Leonard,the CEO,tells investors that $2 million in revenues were made above that for the 5 properties sold.Leonard also tells us that their weighted average interest rate fell from 3.93% to 3.75%.All these small improvements help to increase operational income or at least to reduce the decrease in op. income.To this end,adjusted funds from operations (AFFO) went from $4,884,000 to$4,237,000 in Q2 and from $9,754,000 ($.16/share) to $9,507,000 ($.15/share) in the first half. AFFO is the financial statistic that most investors rely on when analysing reits.

      Looking for Sunny Days

        This is a tough time in Quebec and eastern Ontario.And there is little doubt that BTB counts on the more stable incomes in Ottawa to prop up it's share price.But what lies ahead for BTB?It is going to have to sell off more of it's properties with high cap rates and some gross profit and find properties with low cap rates and lots of potential.For example, BTB tells shareholders that it sold a property on Sherbrooke Street in Montreal and the total proceeds were $22 million.But we do not know what the gross profit nor net profit(after tax) was here.Investors now need to see more acquisitions with low cap rates and more sales with high cap rates.It seems at this time that Michel Leonard is too focused on increasing the total assets of BTB Reit and not enough on increasing market capitalization.So this blog sees more "bad weather" before investors see "sunny days" coming from BTB Reit.

      http://www.canadianmoneysaver.com/ https://www.goodblogs.com/

 

The Price of gold rose 10% since July while Oceanagold shares fell by 35%

    The price of gold has risen dramatically throughout 2020.In July it was trading at below $1800 an ounce and now an ounce sells for $1940 for an almost 10% rise.On the other hand,in July Oceanagold was trading at a 52 week high of $4.01 per share.Now it trades at $2.62 per share for a steady drop over the 2 months.Now should be a good time to buy.But Oceanagold (OGC) has one problem that is dragging down the share price.It's large Didipio mine in the Phillipines has been closed down for most of the year.

     Production has been steady              

  However OGC has been busy during 2020.They have gotten feasibility studies on all mines which includes mines in New Zealand (north and south island),and U.S.A. They have also developped their Martha Underground Project and their new WKP mine.They have discovered an increase in mineral reserves at their large Macraes mine of 250,000 ounces.Oceanagold tells investors that  production guidance for 2020 will be 295,000 -345,000 ounces.And their Martha Underground project will commence in Q2 2021.

      The Didipio Mine

      The Didipio mine is being held up by concerns for the pandemic. According to a Manila website at this time there is no threat to OGC ownership but it needs an extension to it's operating permit.This website says also that apparently the Phillipines government believes that working in the mine could threaten the safety of the villages around the mine.Workers could bring the pandemic home with them and into the village.So at this time it seems that Oceanagold is awaiting a Covid -19 vaccine.However this blog believes that the Phillipines government could move faster on issuing a permit if they had a stake in the profitable Didipio mine.News on a covid-19 vaccine could send OGC back towards $3.25 per share.Selling the Phillipines government a small stake at a discount in Didipio might bring immediate news of a pending operational permit.Then OGC will surely head back to the $4.00 level.Especially if the price of gold beaks through the $2000/ounce level and this blog feels that it will soon.

      https://www.fool.ca/free-stock-report/release-evergreen/?source=ex9badeb10000006&gclid=Cj0KCQjwhvf6BRCkARIsAGl1GGj0oqEoaWxZHOM0Iw9H98KTrs4nHT3hZPGJYIz65_59ifRn4wlklbQaAnkoEALw_wcB;  http://www.canadianmoneysaver.com/

Mediagrif ends Job Search and Strengthens E-Commerce Business

       Mediagrif  (MDF)  has  restructured itself  considerably in the last 5 years.It was concentrating on digital advertising and then on job search.Now it has turned to SaaS and digital commerce.It also does some strategic sourcing.The transformation has been moderately successful and MDF has now cobbled a 5 year plan to move even further ahead in this growing area.

    Past Blogs

   This blog has made a number of blogs on other websites encouraging Mediagrif to expand it's niche.Blogs on Wordpress (Blogdaleup) and Google Blogger (Blogdaleupsome) have suggested that Mediagrif take on new areas even with low margins originally.Perhaps that's why they started LesPAC and other job search websites.But now they are firmly in  digital commerce and strategic sourcing.It may have been a good idea to keep some of their job search websites.But it is clear that MDF sees a vast,gropwing market in e-commerce.

   Revenue for the first quarter of 2021 was $21 million up by 8% over Q1 in 2019.While returning revenue was $ 16 million for a 11% increase.Adjusted EBITDA for the quarter was $2 million.However they reported a net loss of $1.2 million or ($.08) per share.

                            

      Throwing it All Away

    Mediagrif was always considered to be a technically superior company;their work was always professional and well-priced.And now they have changed their metier.But there was no need to close it all down nor give it away.It is this blog's opinion that there are other companies that might pay for these assets especially including Mediagrif expertise.With this in mind, this bog encourages MDF to ressurrect their job search websites and programs.This includes LesPAC or something new but close to it.There are other companies that need this kind of revenue,especially with Mediagrif assistanc,even a Mediagrif contract..This blog has encouraged a "combination" with technically inferior Tucows for some time.Tucows has substantial revenues and earnings but no growth potential.And little technical expertise.Why not fix up LesPAC and market it better?And then try to make some kind of deal(a sale or a contract) with a technical novice like Tucows?

     Mediagrif used to trade in 2017 at $22 a share.And it had a lot of valuable assets and staff.It's market capitalization was approaching $600 million.Now it is valued at about $125 million.But there are assets and staff that are undervalued.Investors should look for some news on a forthcoming deal with Tucows or another company with more earning and looking for new revenues.This will send MDF up to the $6-$7 area by year end.

               https://www.zacks.com/ https://www.mediagrif.com/

Dye and Durham goes Public with IPO

   Dye and Durham(DND) was a legal stationary and forms business that started in England in 1874.It evolved gradually and in the 1990s acquired several legal forms businesses.Then in 2014 it acquired Stanley Davis which is an software and technology firm and this changed the way DND did business.Now it provides a cloud-based platform for legal services and risk management services.On July 17 of 2020 it created one of the largest IPOs for the year at $150 million(CAD)The IPO price was at $7.50 a share.It's British shareholders picked up a chunk of the new shares to now own 35% of DND.Before the close on July 17,2020 the price had moved up to $13 a share.

      A Hot Summer

     DND has still not shown it's shareholders the first quarterly report.Likely that will be in October at the end of the quarter on  September30.But before it went public it had quite good news for shareholders to view.For example, revenues increased from $18 million in 2017 to $66 million in 2020.Adjusted EBITDA was $19 million for 2019.And for the 9 months ending March 31,2020 revenues increased 80% compared to the 9 months of 2019.Yet it's net loss went from $1 million in 2019 to $7.5 million in 2020.So the first quarter reporting will have negative e.p.s. until adjusted EBITDA climbs higher.This is the same trend seen in all the new online phenomenons- large increases in revenues but earnings trail behind at the first.Later the structure and expenses will be reduced and earnings will emerge.But shareholders certainly believe in the DND business as they have bid the share price from $7.50 on July 17 to it's present $27 in September.It certainly has been a hot summer for Dye and Durham.                  

      Fall is Coming

   The first day of fall will be on September 22.This blog sees a continuation of the price movement seen in August.So it is very likely that DND will be in the $30 price range before the quarterly report in October.It is indeed possible that Dye and Durham will show shareholders revenues of  $80 -$85 million for it's first quarter and $100-$110 million for the year.However the net loss may be as high as $10 million for the quarter and $12-$17 million for the year.It is also possible that DND makes another small acquisition in the real estate research area to expand it's market.The future seems rosy but the future price is hard to predict.               https://www.zacks.com/   https://www.goodblogs.com       

Data Communications Management starts a Partial Recovery

Yes, the train is leaving the station.Data Communications Management reported it's second quarter results  on August 11and there is evidence of a partial recovery.But only a partial recovery as 5 years ago DCM traded at $25-$30 and 3 years ago it traded at $10.So Data Communications has a successful history behind it.That aside DCM stock price has been as low as $.10 in 2020 as the pandemic took it's toll on  the DCM stock price.

Second Quarter Highlights

Revenue was actually down in Q2 to $64 million from $70 million in 2019.However this was offset by a higher gross margin- from 23% up to 31%.Consequently adjusted EBITDA was up 203% to $14 million for Q2 and $24 million for the first half.This had a big impact on net income which went from a $4 million loss to a $4 million profit in Q2 and $6 million profit for the first half.This translates into $.14 earnings per share for the first half.This blog forsees e.p.s of .28-$.30 for 2020.A P/E ratio of as low as 3 will send the stock price to the $1.00- $1.25 area.             

More Work to Do

Data Communications Management has a very clean balance sheet.It picked up some small printing operations in 2018 but has cleared down it's debt.It picked up a small telco in 2019 and this has allowed it to raise it's gross margin.But it still only has 43 million shares outstanding.And it even got a government subsidy of $6 million in 2020.However some new shares may have to be raised for it's new potential acquisition of Informetrica.And this blog sees one or two new partners in the near future.It is possible that because of the acquisition price they both may be immediately accretive to net income.But this will not likely make total shares outstanding more than 50 million.And  that will not dilute earnings tremenduously.

Changing their Product Mix

5years ago when DCM was trading around $30 it was getting a lot of government printing contracts.Now much of this has dried up but DCM still gets printing contacts and presentations.But in the last 18 months or so it is getting more and more telecom customers.And soon it will get new data analysis work also.The gross margins are higher here.And this makes a nice blend of business.Revenues will not be as high as in the past but net income will continue to grow.DCM will not be at $25 soon but it has started a partial recovery.

Investors should look closely at Q3 results.It needs a good quarter here.A good quarter will put Data Communications on track to hit $.28-$.30 e.p.s for 2020.That will be a good time to buy as DCM heads towards $1.00-$1.25 per share.         https://www.fool.com/

Sangoma Technology's Annual Report shows it's Flush with Cash

         On August 13 Sangoma Technology (STC) released an update on it's annual results for 2020.These are unaudited results for the yearend of June 30.And on August 14, STC stock moved up 12% to $2.73 per share.Investors saw a number of things in this report that they liked.First sales are expected to be $133 million for a 22% increase over 2019.And 2019 sales were up almost 50% from 2018.Secondly Sangoma tells shareholders that EBITDA will be at the upper end of their annual guidance,that is,$21 million.Guidance was for $19-$21 million EBITDA.No information was given on forecasted net income or e.p.s.But investors can see that even with the slowdown caused by the pandemic Sangoma showed excellent results.The press release pointed out that there was a softening of it's product sales but there were strong service sales.

         Annual Highlights

   Clearly the biggest surprise was the growth in revenues when the economy was in a very slow phase.In fact, the growth since 2018 is almost 250%.That is because Sangoma made 2 important acquisitions in late 2018 and 2019.And it usually takes more time for new divisions to mesh with older divisions and older products.But another large surprise was that STC raised $80 million in 2020.This represents 33% of it's market capitalization in one year.And is an excellent accomplishment for a small cap.STC says that $9 million of the new funds will be used to pay off  their credit facilities.

                                             

 

     The Year Ahead  

     Now STC is sitting in a good position with $70 million in cash and little debt.Some of this cash will be invested in it's present operation to foster organic growth.But there will be lots left over to make acquisitions.Sangoma may already have it's eye on a likely candidate now.But there are a number of listed small caps in it's space with reasonable Price to Earnings ratios.And there is a plethora of junior  techs that are unlisted that are very inexpensive to buy.The benefit of juniors that are unlisted is that they often have new technologies to bring with them.But new revenues are hard to get with a junior technology company.So perhaps the best suggestion for new acquisitions is to take one of each - a junior listed telecom company and a junior unlisted telecom based company.

                 https://www.fool.com/ 

Vecima Networks is on the Move

   Vecima Networks is a little heard of internet video provider.Still it is not that small as it's market capitalization is about $250 million.It largely delivers video streaming and other broadband services to subscribers,usually in remote areas.Recently it made 3 changes in it's management to accomodate it's recent growth.It now has a new COO and SVP (senior vice president) of Content and Broadband Solutions.More importantly it also has two new contracts for delivery.One was to a Canadian cable operator called Access Communications and the second was a Tier1 operator called APAC.Tier1 APAC has more than 5 million subscribers and Access Communications is one of the biggest cable operators in Saskatchewan and Saskatchewan has almost 1.5 million population.                                                                                                          No   estimate is given by VCM as to the revenue that will be earned here.However it is likely that Vecima is only counting on revenue from the content originator like Apple or You Tube at the start of the arrangement.But it is Vecima that has an interface with the customer.And a small subscriber fee  on each service (internet,video,telephone for example) in year 2 would certainly change the financial dynamics for VCM.
          

 Looking Ahead

 These two contracts point to a new future for VCM.Revenue has been flat since 2016 and it had almost no earnings in 2019.But this blog sees it picking up 3 to 5 new contracts with cable companies by 2021.The contract with APAC will require a $12-$15 million upgrade of their system and take several quarters to complete.But cable operators like Sipisiski Cable(Saskatchewan) and even Shaw Cable(Saskatchewan) are potential future customers. So although  Vecima Networks is on the move investors should only expect positive news in 2020.Revenues and earnings will not improve until 2021.Investors willing to wait two quarters should truly see Vecima Networks on the move.VCM is trading in the $10-$11 range now and investors with foresight may push the stock to $13-$14 by yearend.While further good news will send it to $15-$16.    https://www.shaw.ca/  https://www.zacks.com/ 

The real Cost of "Dirty Oil"

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Tucows starts to Transform into More of a Technology Stock

       This blog made several attempts on other websites (see Workathon-Blogger dated 11/07/2019 and 02/04/2020) to suggest that Tucows,a junior technology stock,needs to change it's management style and it's business model.It has relied too much on registering and cataloguing internet domaine names.This is more of a technical rather than technological business.Furthermore it is prone to competition.And it certainly does not require a 7 member board to get paid $300,000-$500,000 salaries each in order to accomplish it's mission.
      Earlier Blogs
  Tucows started off as a small software company.My earlier blogs suggested it acquire other small internet software companies in order to diversify it's revenues.One of these suggestions was to get into online advertising by acquiring smaller internet advertising companies.But in fact it acquired other domaine registration companies.So that now it has a fairly large stable of domaine names plus a small internet provider in southern USA.Tucows is not a complex technology stock but it is profitable.On an e.p.s basis it is more profitable than much larger software companies like Kinaxis and Shopify.And that is because it has steady earnings with little growth and a small number of outstanding shares.And that is because Tucows' management has until recently adopted a very passive style of management and so has not increased it's capital structure substantially for the last 4 years.    

     Starting to Change
  This blog has recommended a consultant look at selling off some parts of Tucows and acquiring other parts.It has also recommended some changes in the board members (especially the CEO) and a reduction in salary for all board members.None of this appears to have happened yet but there have been new hires recently.This presumably is for new functions other than registering domaine names.Also a new Director of Marketing has been hired for the cloud and SaS activities.However no new acquisitions and no new equity issues have been made yet.      

    Tucows has been as high as $120/share within the last year.This blog believes that investors thought that some of it's suggestions had been taken.When investors discovered it was the "same old Tucows" the price retreated to the $70 area.Now it has moved up to the $77 area on the possibility of Tucows changing from a technical company to more of a technological company.      www.motleyfool.ca  https://www.goodblogs.com/  

Blackline Safety consolidates Acquisitions but Slows Growth

 Blackline Safety has made a number of acquisitions in 2018 and 2019.As a result it has shown good growth in revenues and share price.For example, at the begining of 2017 it was trading at $2.50 a share;now it is at $5.75And it doesn't have much debt outstanding.In addition it had a fairly small capital structure in 2017 and it still has only 48 million shares outstanding.But it has had to be nimble to see the increases in both revenues and the share price.            

Business Profile

Blackline Safety is in the business of digital safety monitoring.This is particularly useful in industrial settings when employees work alone or in dangerous activities.It combines digital monitoring with GPS systems.It made one or two small acquisitions in 2018 and 2019.Consequently revenues increased from $12 million in 2017 to $33 million in 2019.This blog expects revenues to hit $35-$40 million in 2020.But there still is no earnings from their endeavours.I made a blog on another website called Blogdaleupsome on the Google Blogger website(date 01/03/2019) which made this prediction."Look for BLN to hit $5.50 to $5.75 this year and maybe $6.00 with a small acquisition."But BLN did not make the small acquisition and it has been hovering around $5.75 per share.

A Likely Dance Partner

The dance partner proposed for Blackline Safety is called Awesense.It is a Canadian small technology company that does energy monitoring,geospatial data and the internet of things.Revenues are not available but it is not listed on a stock exchange-even the TSX Venture exchange.This blog believes that BLN is in too small a niche now and this merger would open up another market or two to it.Blackline does some geospatial data analysis now and this would increase their market.Also it should be not too big a jump to go from digital safety monitoring to energy monitoring.Here is where BLN might cross another revenue threshold.This blog will try to set up a meeting(on Website123.com) of the two partners to see if they want to dance or not. Investors should look at the possible combination of these two small caps as a chance to see future stock gains perhaps up to $7.00-$7.50 for BLN.            

          https://www.zacks.com/

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Tucows awaits Shareholder Report

    On May8 Tucows released it's first quarter report.There were few surprises in the report-especially to this blog.Although adjusted EBITDA was up 34%, revenues were only ahead by 6% and net income by 1%.So e.p.s.went from $.26 per share to $.27.Tucows is in a mature market with competition and needs to find alternative revenue producers.This blog has been saying this for many quarters now.But there has been no changes made.See blog on www.site123.com on 05/11/2020.
    Tucows tells shareholders that about 35% of revenues come from access networks and 35% from value added services and about 25% from domain services.And as most shareholders know access and domaine names require little management.In fact, Tucows (under pressure) sold some of it's domaine name portfolio in 2020.But it also made an acquisition of a domain name wholesaler called Ascio in March  2019.It also made a small acquisition called Cedar Holdings that appears to be a mobile internet provider to increase the footprint of it's long held mobile internet provider called Ting.
    Moving Lawn Chairs on the Titanic
    These changes are tantamount to moving around a few lawn chairs.There needs to be a change in structure that will promote new growth.And that is why many shareholders are awaiting the proposed report to major shareholders on or around May 31.It will be presented to major shareholders by Laurel Hill and one or two consultants.There may be a concrete proposal about new directions to take as well as a proposal to remove several board members that are paid too much for guarding domaine names.Either way this report should improve Tucow's bottom line almost immediately.And that should send the share price into the $90 level before Q2.               https://www.zacks.com/

Detour Gold has a big Impact on Kirkland Lake Gold's First Quarter

On April 8 Kirkland Lake Gold released it's first quarter results and it's production was very impressive.These results included production from recently acquired Detour Gold.In fact, without the Detour Gold production there would have only been a 3% increase in total production.And the increase  in total production was due to the 25% increase in production from the rich Fosterville mine in Australia.However this was offset by lower production at the Holt and Macassa mines.This website has had several blogs on the size of the Fosterville ore body but little on the richness of the grade.For example, in this quarter there was an almost 50% improvement in the average grade of ore to 43 grams per tonne.The Fosterville mine now accounts for 40% of Kirkland Lake Gold's total production.
        Detour Gold is Wrapped up now
      This blog Workathon in 16/09/2019 predicted that Kirkland Lake would need to issue 90 million shares to acquire Detour Gold.The calculation was that the cost of the acquisition was $4.9 billion and the reserve size was 14.5 million ounces.In their latest press release Kirkland Lake  states that it  only issued 77  million new shares.However it also paid in cash $100 million to repay Detour debt and $30 million to close out Detour's gold hedge positions.In addition, KL doubled it's dividend in 2019.      

     The Fosterville mine Revisited

    In several earlier blogs on Workathon it was calculated that the  size of the Fosterville mine in Australia had been underestimated.Now in this quarter, KL management tells shareholders that Fosterville production is up 25% from Q1 2019.Although no new estimate is given on the size of the ore body.They do say that they are looking at a new mine entrance in the north in the Robin's Hill sector.Presumably the new entrance is to increase production in 2020 or 2021.My blog on Workathon dated 16/09/2019 estimated that the size of the gold deposit here was possibly greater than 8 million ounces.KL later made the statement that the Fosterville ore body was at least 6.5 million ounces.And now KL says that there was a 24% increase in Fosterville production in Q1. Furthermore,only now does Kirkland Lake Gold tell shareholders that they are experiencing dramatic improvement in the average grade of ore (up to 49 grams per tonne).Most of this gold is in the Phoenix fault.But Newmarket Gold,the previous owner, found grades of 80 to 100 grams per tonne in the last two faults,that is, the Lower Phoenix and Eagle faults.If this is consistent throughout the fault the size of the Fosterville deposit may be quite a bit bigger than 8 million ounces.
                                              

  

Summary for 2020

There is no doubt that the acquisition of Detour Gold has had a big impact on Kirkland Lake production for Q1 and will have for the rest of 2020.This blog in the Workathon blog dated 16/09/2019 predicted that KL would have to pay 90 million shares to pay for Detour Gold which had a valuation of $4.9 billion.in this report they tell shareholders that they issued 77 million shares and paid out $130 million in debt.That was largely because at the time of that blog gold was trading at $1460-$1500 per ounce and now it trades at $1700.Kirkland Lake told shareholders in their last report they might sell off some non-core assets including the Maud Creek and Cosmo mines.This will enrichen their on hand cash balance.Also production from Detour might increase in Q3 or Q4 as KLmanagement intends to invest another $25-$30 million into upgrading the Detour Gold mine.             

                                                   https://www.vaneck.com/row/

Oceanagold Prepares for Phillipines decision on new Start Up Date

On May 6 Oceanagold released it's first quarter operational report.It contained some information that Oceanagold shareholders have been waiting for but the final report will be out on May14.The Phillipine government has not  yet allowed production to continue  on the Didipio mine but negotiations seem slightly more friendly than in 2019. There has been a hiatus of about 7 months now.And OGC is still waiting to see if any  conditions will be required in order to begin production at their Didipio mine.In the meantime the Phillipine government has granted some minor concessions while the President of the Phillipines studies the timing for the new startup of the Didipio mine.

This website predicted in my blog dated Workathon 01/08/2020 that the Didipio mine would likely be operating by the start of Q2.But that will be in 3 weeks and that would make the shutdown almost 8 months.This blog would like to see the Didipio mine in operation sometime during Q2. 

Q1 Highlights

Consolidated gold production was 80,707 ounces plus 54,134 ounces of silver.Both were well above production in Q1 2019.In addition,there were increases in unproven reserves of 1.5 million ounces of which 800,000 was measured and indicated (M&I).The high production was chiefly because of the resumed operations at the Macraes mine.Furthermore they have enhanced development of the Martha Underground project at their Waihi mine.These developments have caused OGC to maintain their annual guidance and expect stronger second half performance.

Actual gold sold was up in Q1- to 91,400 ounces from 37,800 ounces in 2019.This includes the sale of 6,450 ounces from the Didipio mine that had been put in storage in gold bars form for several months.The Phillipine government allowed them to be exported and sold.

           

Summary

This is a preliminary report; the final Q1 treport will be out on May14.This report tells us that 54,134 ounces of silver were produced but it does not tell if this was an increase over Q1 2019.Doubtless the revenues were higher in this quarter because of the increase in the price of silver.It is important to notice that even with a 5 week lockdown (for health reasons) Oceanagold will maintain it's original guidance.And this is partly because the average price of gold  has increased by 25% in Q1 2020. Perhaps it will now invest more into it's partly owned subsidiary called New Pacific Minerals.All of that aside, soon investors will be demanding more concrete action towards the startup of the Didipio mine.

Tucows has another quarter but Same Old,Same Old

 Tucows had another average quarter so that annual revenue came in at $337 million or down 3% from 2018.While annual net income showed as $15.4 million which was down 10% from 2018.There were no major changes of any kind.So  annual revenues and earnings were down from 2018.More importantly e.p.s. was down 10% to $1.45 per share.While the CEO was proud to announce that operating cash flow was $40 million.But managing Tucows (TC) is about as complex as having the guy in the caption above in charge.And that is why this blog recommended in my blog on my website called Blogdaleup dated December 4,2019 that their CEO be replaced.
        A true Software Company
This blog is disappointed in the reduction of annual revenues as well as annual e.p.s.This is what determines the price of Tucows' shares.In 2019 Tucows reached a high of $120 per share.But investors realized that Tucows is not a real software company.It is only a domaine registry.It only takes a few guys like the one above to collate and manage the domaine names.Elliot Noss,the CEO, tells investors that TC earned $40 million in operating cash flow but then he says that he wants to put much of it into a mobile telephone company called Ting in southern USA.And he has already put $32 million into Ting.There is little mention of the earnings from Ting because earnings are minimal.This blog has called in the past and again for Tucows to look at acquiring a small internet software company to build for the future.Earnings may stand still at first but will gradually climb with an accretive acquisition.In short, the domaine registry will finance the acquisition to help build Tucows into a true software company.
                             

      Who will lead Tucows into the Future ?
  It is clear to this blog that Tucows needs a new direction and new directors.First there is negative growth in revenues,earnings and e.p.s. While adjusted EBITDA grew only by 4% in 2019.Domaine names is a mature market;TC needs a new,growing market.But in order to do that there needs to be a new CEO and 3 or 4 new board members.In summary,Tucows needs "new blood ".Especially when the "old blood" is getting paid $500,000-$600,000 each.
                   

Kirkland Lake takes Detour then a detour itself

Kirkland Lake Gold (KL) released it's fourth quarter and annual results on February 25.Results were good so KL told it's shareholders that it has doubled their annual dividend.KL  also told it's shareholders that it has completed the acquisition of Detour Gold for $4.9 billion.Detour Gold has a large ore body with a low to medium grade of ore.In contrast,Kirkland Lake with it's Macassa mine and especially it's Fosterville mine in Australia has a high grade of ore.So the highly profitable Kirkland Lake operation will be used to develop the Detour Gold operations.Strangely though investors have taken Kirkland Lake Gold share prices down -not up.
    Annual Highlights
  First, all of the Q4 operational indicators were ahead of the values for Q4 in 2018.Production ahead by 21%,revenues by 47%,EBITDA by 52% and more importantly adjusted net earnings by 76%.But the annual figures were even better.Revenues at $1,380 million were 51% ahead of 2018,net earnings at $560 million or $2.67 /share were 51% better and free cash flow at $463 million was 81% higher than 2018.One of the main reasons for net earning being proportionally higher than production is the high grade of ore at their Fosterville mine in Australia and the increase in gold reserves.          

       The Detour Gold Addition
   It is this blog's opinion that Kirkland Lake Gold has a pretty good system set up now.First the production and net earnings coming from the Fosterville mine(Australia) and the Macassa mine(Ontario) is continuing to increase because of the high grade of gold,especially in their Fosterville mine.KL is also looking at a second mine entrance to their Fosterville mine.Kirkland Lake production is doing so well that they have deemed their Holt Complex mines and the Cosmo mine in Northern Australia as non-core operations.                                                                           Cosmo was the original mine for their predecessor Crocodile Gold ;the mine was thought ot have about 500,000 ounces.But  exploration  by the second owner Newmarket Gold here  found a second major vein so that the ore body may be as much as 1 million ounces now.Kl has other former Crocodile Gold assets like the Union Reefs mill and the Maud Creek mine which had a positive NPV in 2013 with gold prices at $1200/ounce. Kirkland Lake could make a small Australian  subsidiary based around the Cosmo  mine and sell it off.As KL may need more cash to help pay for Detour Gold.
   Kl also strengthened it's share price by buying back 20 million shares which will be equal to about $750 million.And lastly it will invest $25-$30 million into Detour Gold to increase production.Amazingly Kirkland Lake has not had a new equity issue to help acquire Detour Gold.But the increase in the price of gold has certainly given it some additional support.
       Summary
   It is very difficult at this time to predict the price of KL for the rest of 2020.The stock market is highly irregular and the price of gold has moved up.Kirkland Lake's stock  price has now factored in the Detour Gold acquisition.However there may be some non-core divestitures or a new  Australian subsidiary formed.And Kirkland Lake still has not told shareholders how much of the Detour acquisition has been paid for and how soon the rest will be financed.That aside Kirkland Lake Gold has a very strong operation now and a proven large gold reserve.     

Oceanagold meets Guidance,gold price rises, but Share Price Falters

    The gold price has risen for the last six months and now trades at almost $1575 an ounce -a 25% rise since June 2018.As the currencies,including the American dollar, start to be less stable investors move into gold.And this has been the case again in 2019-2020.But not all gold stocks have reacted  in parallel to this rise. Oceanagold which is listed on the Australian index(ASX) and the TSX took a tumble in the fall and has not yet bounced back.In fact, in June 2018 OGC traded at $3.60.The  main cause  of the drop was the closing of their mine in the Phillipines called Didipio.Still Didipio produced 83,000 ounces of gold and 10,000 tonnes of copper.The mine closing was started by a local court but  Oceanagold appealed and won in a federal court.Now the matter is being reviewed by the President of the Phillipines and a victorious decision is expected by the end of Q1.However this blog expects some conditions to be attached to the upcoming victory.
          New Production
   Oceanagold (OGC) has not been dormant while waiting for the Didipio decision.In the back half of 2019 Oceanagold has completely replaced the earnings and the lost production in the Phillipines. This was forecasted in my blog on Workathon of 23/10/2019.Their mines in America and New Zealand have increased production by 20-26%.In addition, they have discovered new gold ore at their Waihi mine and especially in their Martha Underground project.Production at their Waihi mine will likely increase in 2020 and the Martha Underground in Q2 2021.Production guidance will rise in 2020 with or without their Didipio mine.And some experts ( such as Jaimie Carasco) are predicting a $1600 price of gold in 2020.
      New Gold Reserves at old Mines          

  The main reason for increased guidance will be the new reserves they have located.And these new reserves are mostly extensions of existing mines.So they are analyzing their properties more thoroughly than in the past with quite effective results.Often the best place to look is just beside your old mine.They also bought a considerable amount of land around their Macraes discovery and expect a substantial ore body.Lastly they found a new gold discovery in New Zealand not too far from their other New Zealand mine.This reduces the Didipio mine to being a wild card although a nice wild card to have.                  

Intrinsync Technology " sells the farm "

     This blog has been saying for several years now that Intrinsync Technology needs new products and new revenue streams.Their last quarterly report (Q3) shows a continuation of the same trend  seen over the last 2 years.Consequently they have decided to use their open-Q module technology and it's revenue stream to get themselves a better deal.It is not that they weren't getting orders and even some very big ones.But their revenues were showing little or no year over year increase.Consequently this blog tried to arrange a merger with Sangoma Technology which is in their market space but showing more growth.After several attempts at a Canadian merger Intrinsyc decided on an American partner.They chose to dance with Lantronix which is listed on the Nasdaq exchange and has a market cap of about $92 million.
      The Future for Open-Q Modules 
  Intrinsyc Technology was originally doing much more software technology but they gradually switched to doing more hardware and then adapted this hardware technology.I believe they got a hardware contract from Quallcom to buy and build computer modules they referred to as Open-Q modules.And gradually they only sold these modules.This blog criticized them for being too dependent on a single product line.So they started to modify these modules to be used for various applications.Still the market was too limited and revenues stalled.However they were getting some bigger orders and this blog became somewhat hopeful of their future.Even at that, this blog recommended an alliance with Sangoma Technology which had a more rapidly growing product line and market.Sangoma is located in Markham, Ontario and the distance between them may have hindered a merger.      

         A Healthy Merger
   This blog would have preferred to see a Canadian merger, especially with Sangoma Technology.However it will probably do well with Lantronix(listed on the Nasdaq) which actually has a smaller market capitalization. Sangoma produces communication infrastructure and Intrinsyc Technology designs,produces and modifies telecommunications and internet  computer modules.ITC has increased the number of applications recently partly because it  modified the internal software of it's Open-Q modules. It still has it's some of it's software capability remaining.In addition, ITC now gets some quite large orders to manufacture and modify communications   equipment.Ideally this could have been a very successful Canadian combination.If the merger with Lantronix is as suitable, look for ITC to drift slowly towards $2.00 a share by early summer.If not then Sangoma will likely be watching closely.