Mid August 2022 Update - $ISDR, $ISV.to, $VMD.to & $VMD, $MCB.to, $PZA.to, $CPH.to, $GEO.to
Welcome back. I hope everyone is getting some quality time in with family and some Vitamin D.
Thoughts on Market Activity
Interesting to see the gyrations in interest rate expectations. As usual, I have no idea what will happen and when. This was a busy two weeks and the next two weeks looks quite busy as well. I have been keeping tabs on a few companies for awhile that I haven’t mentioned here that seem to present an interesting opportunity.
What I’m Reading
The Automobile Industry background over at Rational Reflections is a good read for those interested. Lots of interesting data points and charts.
Huge list of resources from Conor over at Investment Talk. Something to bookmark and go through what you will find valuable.
Podcasts I Enjoyed
Will Thorndike on Invest Like The Best
Good background on what makes outstanding long term results. I enjoyed hearing about the screening process they employ and some other important tidbits.
TransDigm on 50X (final episode)
Really deep dive on TransDigm. I appreciate all the work that went into this and they are willing to share it.
Business Breakdowns on Union Pacific
Absolutely fascinating podcast on the history of the rail industry. I think this is a must listen for those interesting in the transportation industry. I don’t think I appreciated how much of the previous decisions around land ownership shape the industry today.
Paul is always worth listening to. The more I continue down this journey as a full time investor, the more I appreciate those who have been doing this successfully for several cycles.
Doomberg on Value Hive
I did not anticipate enjoying this interview as much as I did. There are so many little nuggets of wisdom that I will be listening to it again. The 5 pillars of a business insights were really good. Have-to time vs. Want-to time was also a great way of crystalizing the concept how you spend your time. Keeping the brand integrity and the continuous improvement mindset are things I don’t spend enough time thinking about. Great interview. I will be listening to it again.
Company Updates
Issuer Direct - ISDR 0.00%↑
reported Q2 2022
results were in line with my expectations
I expected some lumpiness in top line for a few reasons
as the events business shifts from virtual to some sort of mix between virtual and in person
uncertain decline rate in legacy ARS services
uncertain pick up in new products launched
NCIB to be completed soon, I expect another to be announced
now trading around a market multiple for 2023 if you remove the cash
Information Services Corp - $ISV.to
reported Q2 2022
results were ahead of my expectations
I have stopped following ISV closely to focus on other opportunities
Viemed - $VMD.to
announced additions to the executive team to lead drive acquisitions
nice to see the focus on this
gives me some confidence that they are likely going grow inorganically
reported Q2 2022
top line was above my expectations (and guidance)
operating margins were weaker than I expected
they are investing for organic growth and it’s front end loaded so it will take some time to scale into the higher costs
they have an inflation adjustment from CMS to take effect in January 2023 so that will also help with margins especially after a year of such high inflation
near complete resolution from the OIG investigation is a major positive
they have invested for growth via the income statement before and had temporarily lower margins
McCoy Global - $MCB.to
reported Q2 2022
results were a bit weaker than I expected though this is a lumpy business and I don’t put much emphasis on a single quarter
revenue essentially doubled vs last year
book to bill was 0.88 during the quarter and the large order didn’t hit the backlog until after the quarter ended
H2 2022 and H1 2023 look to be strong at this point
doing a sale leaseback for a facility in Texas to free up some capital
Pizza Pizza Royalty Corp - $PZA.to
reported strong Q2 2022 results
I have stopped following ISV closely to focus on other opportunities
Cipher Pharmaceuticals - $CPH.to
reported Q2 2022
top line down due to lower Absortica revenue
margins consistent due to cost management
though the quarter was not very eventful from an operational standpoint, there are a few different avenues to make money here
Geodrill - $GEO.to
reported Q2 2022
stronger than I expected
demand looks strong
still trades quite a bit cheaper than peers
Long - $ISDR, $VMD.to & $VMD, $MCB.to, $CPH.to, $GEO.to
Hey TT.
For ISV, I still follow it. I just won't be updating here . I will still follow it offline, but it isn't on my "close watchlist" at the moment. I like the core business, but I need to get a little more versed on the recent acquisitions and what that part of the business looks like going forward. I came on my radar mainly as a dividend play, but the recent pivot towards growth may affect the cadence of dividend raises so I'm not sure where it lands now. Hope that helps.
The 50x podcast is great. I wish I would have had something similar when I started investing. So much good nuggets in there.
Dean
Hi Dean, thank you for the update. Quick question, when you say you stopped following ISV closely, did you get out of it or are you simply leaving that position alone?
The 50x podcast is incredibly good. So much insight from Nick Howley. But one thing he said really struck me. He said equity is the most expensive type of capital so he had to use it carefully. I just wish other CEOs would share this view when it comes to capital allocation