Same plan but new operational Parameters - Data Communications Management

 Data  Communications Management (DCM) is a stock this blog has followed for several years now,Since then it has made several acquisitions and has gained from each one.But the stock price did not move in unison with these acquisitions.The last acquisition was Moore Corp.(MCC) and the stock price surprisingly enough moved down from the $3.00 area to it's  present level.DCM could have made only superficial changes and gotten only superficial gains from MCC.But DCM decided to change the MCC parameters.DCM stated at the time of acquisition that it expected 30-35% gains from the synergies made between the two companies.This blog sees that this will eventually be true but at the present time DCM has spent a considerable amount of money modernizing MCC.Although it has already shut down several MCC buildings that are no longer necessary for the combined operation.The new operation is quite a streamlined one now.

        Q1 Results

      In  Q1 most of the financial indicators  were higher than in Q1 2024.Net income was $5.1 million versus only $1.5 million in Q1 2024. Adjusted EBITDA was $18.6 million versus $18.1 million in Q1 2024.And a special dividend of $.20 was instituted in order to show shareholders that management has confidence in their performance as well as their resultsAnd. that they can manage this fairly large expenditure.DCM  also will pay it's second regular dividend of $.025 per share.By far the main fact that the report revealed is that e.p.s. went from $.03 per share in Q1 2024 to $.09 per share in Q1 2025.This blog feels that DCM is on track to hit $.40-$.50 earnings per share on an annual basis.                                                  

      Is Zavy savy? 

   This blog believes that DCM should expand it's exposure to their digital operation.With that in mind several recommendations have been made to acquire a small American digital printing and transcribing operator called VQS Solutions.It's market value has dropped substantially over the last year but it's technology is "top of the line."In addition,VQS has gotten substantial  new attention and buyers so that it has moved up 35% in the last month.VQS aqppears to have a new suitor.This is unfortunate as there is no doubt that there would be synergies here between DCM and VQS.                                                                But DCM had other ideas.Instead it acquired a small New Zealand software company called Zavy.But it appears that Zavy is working independently from DCM.First this blog suggests that more money be invested into Zavy.This blog suggests that  money be spent on labour and equipment so that the operational scope of Zavy increases.It can do quality work for their own customers as well as do problem solving for DCM customers.This could help automatize DCM operations.And should DCM acquire VQS Solutions down the road changes could be made to Zavy to make it fit together with the newly acquired VQS.

Annual  Guidance 

  Normally DCM only gives general guidance for revenues and earnings for the entire year.However they can give specific guidance for the next quarter.Most analysts believed that annual revenues would come in around $520 million and e.p.s. of $.55.However it has been reduced to $495 million and $.45 per share.This blog believes that revenues may get to $500 million  but e.p.s. should stay at $.45-$.47 per share.Also there is no doubt that Zavy will have to be overhauled to fit into DCM operations

   By the fall of 2025 Data Communications Management should be trading around $5.It is true that DCM took longer than expected to streamline their acquisition Moore Corp.It also appears that they spent more money than planned to fit Moore operations with DCM operations.However now much of the combining has been finished and DCM is ready to gain the profits from this acquisition.The overall plan has not changed and DCM is ready to move forwards.Data Communications is having trouble staying above $2.00 but a little more positive news should send it on it's next step towards $5.00.

         Dale Mcintyre (M.A.(Econ)) is a freelance writer that works for a number of financial brokers.    www.marketbeat.com ;https://finance.yahoo.com/

                                                                                                                                                           

A whole new parameter - lithium production.

America wanted to make a deal with Ukraine for basically 5 critical elements in exchange for a half trillion US dollars.The five elements are titanium,lithium,graphite,nickel and cobalt.One of these 5 was the increasingly in demand element, lithium.Lithium,according to this blog will be more,not less,in demand at least until 2030.The increase in demand will chiefly come from electric vehicles but also from cell phones and renewable energy transmission.Most analysts and most studies show that U.S.A. has quite low reserves of lithium.Several analysts peg the total reserves at only 750,000 tons.Although it is true that some esoteric studies have shown American deposits of several million tons.It has not been substantiated.

Estimates are that the annual American requirements of lithium are about 500,000 tons  for electric vehicles alone.This blog believes that another 100,00-200,000 tons could be required for these other uses.

Imports of lithium

At the present time U.S.A. has to satisfy it's lithium needs by imports from primarily 3 exporters.The 3 exporters are Chile,Argentina and Australia.Canada exports a meagre $194 million, mostly to the growing American market.However Chile,the second biggest exporter exported much more.Although information on Chile exports are hard to get  some estimates are that Chile exported from $10 to $14 billion of lithium to the American market.However Chile  is in the process of nationalizing the lithium industry and this complication may create a chance to increase Canada's share.As often nationalized companies are difficult to deal with and may be very sticky with their prices. And because of it's closeness to American market, Canada may well be able to increase it''s market share at the expense of the other 3(Chile, Argentina and Australia) who export to the American market from a considerable distance.        

Status of Canadian producers

The Canadian lithium industry is presently quite fragmented.12 to 18 months ago there were only 3 lithium mines in Quebec.Now there are 12 to 18 mines in Quebec of various sizes and the largest of these  (North American Lithium)exported  the entire $120-$140 million of total Canadian exports in 2024. Much of it went to France.But recently NAL has discovered 3 other mines near their main NAL mine.This complex is now called the Abitibi hub and there is the potential to increase production significantly.                                                                     There are also 3 or 4 mines in Manitoba but they produce very little and mostly to meet local demand for lithium.However as has been written in my blog on January 11 in Wordpress (Econothon) there has been a new 100 million ton mine discovered in Yellowknife (NWT).But at present it is still being developped as  there is no production yet from this mine  north and east of the Manitoba mines.This blog sees that lithium could be trucked down the Demeter highway in convoys to the American market relatively cheap.But there is no doubt that the present owner LYFT Power. needs outside investment Someone like Brookfield Resources or more likely another miner such as Tech Resources or Hudson Bay Minerals would be beneficial to both parties.There would be a substantial cost in order to start production but at the time of writing lithium sells for $21800 USD per metric ton and up to $65,000 per metric ton for battery grade metal  and it has been higher.

The NAL mine in Quebec is owned by a company called Sayona Mining and it could become a nice acquisition for one of the large gold miners in Quebec.

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 Dale  Mcintyre (M.A. (Economics) is a freelance writer that writes for several financial brokers including Zacks and Yahoo Finance