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/