March 2021 Update - $OSS.v, $REPH, $ISDR, $PSD.to, $ISV.to, $STC.v, $FTG.to, $VMD.to, $SYZ.to, $MTLO.v, $DWSN, $SVT, $FXC.to, $PZA.to
TIKR
I use TIKR to quickly look through ideas and check comparable companies. Would recommend. Referral code below.
https://app.tikr.com/register?ref=smob7c
Podcast
I was a guest on In The Market Trenches podcast this past month. Have a look/listen.
Thoughts on Market Activity
Once a month I write in my investment journal to attempt to capture my current thoughts on the public markets. It’s not a forecast and I am not a macro guy. It is a quick snapshot of what is happening in real time and how I’m processing it.
This month I made note of how the broader market seems to continue to rotate out of “what worked in 2020”/SaaS/lockdown names and into “recovery” companies. The S&P ended up 7.4% YTD, while the TSX ended up 6.7%. The Russel 2000 has now outperformed the Nasdaq comp over the ttm. The disordered pace of covid vaccine distribution seems to be creating lots of noise. As well, there are many that are very concerned about variants and their implications on the healthcare system. It is interesting to experience in real time. This goes without even mentioning NFT, crypto, EVs, etc. Such things I have no business commenting on.
I continue to find some interesting opportunities in more cyclical companies, although these usually amount to more and smaller positions. As always looking for businesses with long term potential, with incentivized management and a reasonable valuation is the main goal and will constitute the largest amount of my energy. Of course, building positions in such businesses takes continuous effort on the bid as they tend to be illiquid.
Building wealth in the most reasonable way for me is not always the optimal way in the short term.
Posts this month
Quick Notes on Companies Recently Mentioned
OneSoft Solutions ($OSS.v)
Announced an acquisition of IP
Not a ton of details
They are usually very thorough on MD&A’s so likely to get more color then
Posted Q4 2020 results
In line with my expectations
MD&A is a must read to understand the value proposition
Recro Pharma ($REPH)
As mentioned before, I have sold but continue to monitor
Issuer Direct ($ISDR)
Released Q4 2020
Results were good
Continue to hold my position
Pulse Seismic ($PSD.to)
Reported auditor change
Non event as it was board approved
Lots of volume on March 12
Information Services Corp ($ISV.to)
Released Q4
Business is holding up well
Margins have ticked up a bit
With the Paragon acquisition they are getting more revenue from services
Some delays due to covid, but it didn’t sound like anything major
Interesting company
Sangoma Technologies Corp ($STC.v)
Officially closed the acquisition of Star2Star
Firan Technology ($FTG.to)
Polar Asset Management sales
528k shares sold from Jan 8 to Feb 12
About 50% of the trading volume
They now own about 9% of the outstanding shares
Viemed ($VMD.to)
Reported Q4
Still executing well
The covid related one time revenue will run off
Call indicated that they can return to historical growth rates once we are fully reopen
Sylogist ($SYZ.to)
Received conditional approval to list on TSX from TSXV
Acquisition of MAS (Municipal Accounting Systems) and new credit line
37.8 mil in cash
7.4 mil rev
4.3 mil ebitda
Will be immediately accretive
Held a call after the acquisition
Will list on TSX shortly
Integration of MAS 90-120 days
Key employees staying on post integration
Investing in sales and marketing to expand MAS geographically
Announced they will list on TSX
Martello Technologies Group Inc ($MTLO.v)
They announced a private placement concurrent with the bought deal
This was closed and mgmt. participated for about 1 mil
I have sold my shares at a small loss and will move on
I will continue to monitor for a few quarters
Announced strategic sales win
It sounds quite positive
Dawson Geophysical ($DWSN)
Reported Q4
As expected rev way down
Potential to recover further with O&G activity
Servotronics ($SVT)
Filed a notification of inability to timely file their 10-K (deadline was March 31)
Micorcaps are fun
FAX Capital ($FXC.to)
Announced a placement with QUIS
16 mil shares at $1.25 for 20mil total
1 year lock up
Able to nominate a board member
They should still have lots of cash left over after this
Closed Carson Dunlop acquisition and placement with QUIS
Also appointed a president (graham Badun) of a new platform company
Was president of Alarm Force
Q4 results posted
No surprises
Estimating they have about 45% cash in book value after the acquisition of PEO
Pizza Pizza Royalty Corp ($PZA.to)
Reported Q4 2020 - Not much to report
Ontario and Alberta have been under fairly strict lockdowns during the back half of the quarter
Non traditional is hurting
Payout ratio was 84%
They feel they can grow store count by 5% in 2021
The author is long $OSS.v, $ISDR, $PSD.to, $STC.v, $VMD.to, $FXC.to at time of writing.