InvestMacro

Source: Rob Goff   (3/23/23)

The Canadian firm has a “blowout” quarter of significant organic growth that calls for increases to 2023 revenue and EBITDA estimates, noted an Echelon Capital Markets report.

Playmaker Capital Inc. (PMKR:TSX.V; PMKRF:OTCQX) outperformed in Q4/22 such that revenue and EBITDA were “a large step function” above forecasts, reported Echelon Capital Markets analyst Rob Goff in a March 21 research note.

“Results across 2022 support our bullish view towards Playmaker’s organic and inorganic growth as management has assembled high-growth, entrepreneur-driven partners onto its platform, where additional investment, greater platform reach, and an in-house tech stack drive growth and monetization,” Goff wrote.

Attractive Investment Opportunity

The analyst also highlighted that Playmaker’s enterprise value:EBITDA multiple is “irrationally cheap,” and Echelon rates the company Speculative Buy. Playmaker’s current share price is about CA$0.48 per share, and Echelon’s target price on the Ontario-based company is CA$1.20 per share. This price difference indicates a potential 150% return for investors.

Noteworthy Organic Growth

Goff discussed Playmaker’s Q4/22 and full-year 2022 (FY22) revenue and EBITDA, highlighting the company’s outperformance due to the strength of its acquisitions.

Revenue in Q4/22 was US$18.7 million (US$18.7M), which surpassed Echelon’s US$11.1M estimate and consensus’ US$11.9M forecast. Likewise, Q4/22 EBITDA was beat at US$6.6M versus Echelon’s US$4.2M projection and the Street’s US$4M estimate. Goff noted these figures exclude any revenue contribution from the World Cup.

Q4/22 pro forma revenue (US$19M) and EBITDA (US$6.8M) reflect 102% and 96% year-over-year (YOY) growth, respectively.

Playmaker’s impressive organic growth in Q4/22 was due to a 25% YOY increase in overall user sessions over the whole platform, Goff pointed out. Yardbarker performed the best, achieving 86% YOY growth. Also, Wedge, the newly acquired affiliate marketer, yielded US$5.7M in only two and a half months of Q4/22, “one of the key positive surprises on the quarter,” wrote Goff.

Looking at Playmaker’s FY22 results, pro forma revenue and EBITDA came in at US$47.4M and US$15.3M and also were beat, Goff pointed out. As well they reflect YOY growth of 51% for revenue and 36% for EBITDA.

The company ended Q4/22 with US$8.9M of cash and about US$10M of undrawn credit.

Model Estimates Revised

Based on Playmaker’s “significant outperformance” in Q4/22, noted Goff, Echelon raised its 2023 revenue estimates on it by US$6.6M. The updated amount is US$50.5M.

Echelon modestly increased its forecasted EBITDA to US$15.7M from US$15.2M to allow for greater expenses as Playmaker continues growing.

Disclosures:
1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.  As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Playmaker Capital Inc., a company mentioned in this article.

Disclosures for Echelon Wealth Partners, Playmaker Capital Inc., March 21, 2023

U.S. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Echelon Wealth Partners Inc. is not registered as a broker-dealer in the United States and is not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. Any resulting transactions should be effected through a U.S. broker-dealer.

ANALYST CERTIFICATION

Company: Playmaker Capital Inc. | PMKR:TSXV

I, Rob Goff, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.

IMPORTANT DISCLOSURES

Has the Analyst had an onsite visit with the Issuer within the last 12 months? – Meeting with management/investor at Playmaker’s head office (Nov 17, 2022) – Yes.

“No crowd buys stocks of other countries intelligently”

By Elliott Wave International

The fact that investors from other countries are feverishly buying U.S. stocks might seem like a bullish sign.

On the other hand, consider what Robert Prechter said in his book, Prechter’s Perspective:

No crowd buys stocks of other countries intelligently. For decades, heavy foreign buying in the U.S. stock market has served as an excellent indicator of major tops.

Some of the heaviest foreign buying — whether it’s in the U.S. or another country — tends to occur when a trend is near or at an end.

Looking at an example: In the late 1980s, after years on the sidelines, foreigners became net buyers of Japanese stocks. This coincided with the ending phase of one of the biggest bull markets in history.

Returning to the U.S. but sticking with roughly that same period of history, here’s what the Sept. 2000 Elliott Wave Financial Forecast, a monthly Elliott Wave International publication which covers 50-plus financial markets, had to say as it showed this chart:

This chart of the Dow and foreigners’ net purchases of U.S. equities illustrates how beautifully the pattern has held through the U.S. bull market of the 1990s. The solid lines show the flood of foreign buyers within a month of each high, and the dotted lines show them rushing back out again on the months of the big lows. Early in the decade, when stocks were a bargain, foreigners were net sellers. They did not sustain net purchases until the Dow crossed 8000 in 1997.

By the way, overseas buyers also zealously bought U.S. shares right before the 2007 top.

As a quick reminder, the reason for mentioning all of this is what I said at the outset about feverish overseas buying of U.S. shares presently. Here are more details via this chart and commentary from our March Financial Forecast:

Foreigners are surging back into U.S. equities. At $42.9 billion in November, the latest reading of foreign purchases is higher than both the 2000 and 2007 buying extremes. It is shy of the December 2020 record of $78.6 billion, but if foreigners flocked to U.S. stocks the way retail investors did in January, we may find that when the latest readings are released, foreign purchases will be at a new record.

One way to utilize the foreign buying (or, selling) indicator is with the Elliott wave model.

If you’re unfamiliar with Elliott wave analysis, or simply need a refresher on the subject, check out EWI’s FreePass for a Changed World event – thru March 31.

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Source: Streetwise Reports  (3/22/23)

Data Communications Management Corp., which recently announced its acquisition of a similar company, is reporting marked revenue increases in fiscal year 2022 over fiscal year 2021.

Data Communications Management Corp. (DCM:TSX; DCMDF:OTCQX) saw its revenue go up by 20% and its gross profit rise by 33% in the fourth quarter of 2022, as compared to the same quarter in 2021.

For the same period YoY, the printing and marketing services company said EBITDA was up 89.9%.

For the year ending Dec. 31, 2022, revenue was up 16.3%, gross profit was up 21.1%, and EBITDA was up 45.3% over the year ending Dec. 31, 2021, the company said. For that same period, net income rose by 792.4%.

With its recent announcement that it would acquire R.R. Donnelley & Sons’ Canadian operations, “We believe we are well positioned to further accelerate our positive momentum,” Chief Executive Officer and President Richard Kellum said.

Clive Maund rated Data Communications as an immediate strong speculative Buy.

“Combining DCM and RRD Canada will better position our business for sustainable and long-term success serving customers across North America,” Kellum said. “We believe the transaction also represents a compelling strategic opportunity for shareholders, as we expect the combined company to benefit from accelerated sales growth, reduced costs, enhanced financial performance, further operational efficiencies, and ultimately value creation.”

Analyst Clive Maund of CliveMaund.com wrote about the stock this morning. He noted that “after such a big advance, it might be thought that a top is forming, but this pattern has all the attributes of a bull Flag — the persistent heavy volume on the steep advance has been followed by a marked dieback as it has traded sideways, the Accumulation line has held up well, and the trading range can be seen to be tracking within a slightly downsloping parallel trend channel, in other words, a bull Flag.”

He continued, “This implies that the pattern will soon resolve into another powerful upleg that could very well be as big as the first upleg.”

He shared the above chart and went on to rate Data Communications as an immediate strong speculative Buy.

The company’s year-end revenues beat estimates made by eResearch analyst Chris Thompson, who had predicted CA$265.3 million compared to the actual total fiscal year 2022 revenues of CA$273.8 million.

That, along with the acquisition of RRD, could end up affecting Thompson’s future valuation of the company. Both the revenue increase and the acquisition could increase his equal-weighted target price per share to CA$6.02 from CA$4.44, he said.

“However, until the full financials are released, or the merger closes, we are maintaining a Buy rating and a one-year price target of (CA)$4.50,” Thompson wrote.

Acquiring RRD brings in a team that complements DCM’s own workforce, Thompson said.

“We believe the deal will be accretive to DCM’s financial profile as it accelerates DCM’s revenue and EBITDA growth and diversifies its revenue base,” he wrote.

The Catalysts: Revenue Growth, RRD

DCM attributed the revenue growth to a “combination of expansion revenue with existing clients and new business wins.”

The company reported successfully onboarding 35 new enterprise clients in 2022, increases in client and employee engagement, almost 700,000 trees planted in its PrintReleaf sustainability initiative, and productivity improvements, including the revenue-per-associate metric reaching its year-end target of CA$300,000. That’s an increase of 18% compared to 2021.

The company’s year-end revenues beat estimates made by eResearch analyst Chris Thompson, who had predicted CA$265.3 million compared to the actual total fiscal year 2022 revenues of CA$273.8 million.

Fiscal 2022 revenue was up CA$38.5 million vs. 2021, and gross profit jumped CA$14.7 to CA$84.2 million, the company said. Gross profit as a percentage of revenues grew from 1.3% to 30.8%.

Net income rose CA$12.4 million to CA$14 million, and EBITDA grew CA$11.3 million to CA$36.4 million.

There were no restructuring expenses or other adjustments or one-time costs, except for one-time add backs CA$1.9 million in Q4 for costs related to the acquisition of RRD, the company said.

Total debt was lowered 26% YoY to CA$27.3 million.

Revenue for Q4 2022 was up CA$12.2 million over the same period in 2021 to CA$73 million. EBITDA grew CA$4.5 million in Q4 2021 to CA$9.5 million in Q4 2022.

CA$500 Million in Annual Sales From Day 1

The tech-enabled marketing and digital asset management (DAM) sectors are forecasted to grow annually by 15% and 21%, respectively, Thompson has written.

“As DCM executes its ‘digital first’ strategy, we expect revenue from technology-enabled hardware solutions and tech-enabled subscription services and fees to increase,” Thompson has written.

DAM services generated only 1.3% of the DCM’s revenue in 2020. But “with the proliferation of video and digital content, the total DAM addressable market is forecasted to reach US$6 billion by 2025; thus, there is plenty of upside revenue potential,” Thompson wrote.

“We believe this transaction enhances DCM’s capabilities and growth potential,” Thompson wrote on March 10. “RRD Canada has a highly complementary operating model and is expected to add new products, services, and technology capabilities.”

R.R. Donnelly Canada provides print and related services to thousands of customers across the country, had a revenue of about CA$250 million in 2022, and has 1,000 employees. DCM is only buying the Canadian operations of RRD, which has clients in 29 countries.

“We believe this transaction enhances DCM’s capabilities and growth potential,” Thompson wrote on March 10. “RRD Canada has a highly complementary operating model and is expected to add new products, services, and technology capabilities.”

The new company would have more than CA$500 million in annual sales from day one, an expanded customer base, and an enhanced product portfolio, DCM said.

DCM has been in business for 60 years. It helps companies with branding, communications, and logistics and provides customer loyalty programs, data, and content management, location-specific marketing, labels and asset tracking, multimedia campaign management, and workflow management. Its clients are in many industries, including financial services, health care, emerging markets, retail, non-profits, energy, hospitality, and transportation.

Ownership and Share Structure

Management and insiders own about 45% of DCM, including a share program that gives employees close to 4% ownership.

Top insider shareholders include Director Michael Sifton with 10.2% or 4.5 million shares, Board Vice Chairman Greg Cochrane with 7.43% or 3.28 million shares, Chairman of the Board J.R. Kingsley Ward with 5.54% or 2.44 million shares, and the CEO Kellam with 1.66% or 0.73 million shares, according to Reuters.

According to the company, the rest, 55%, is retail. Reuters lists KST Industries Inc. as the top shareholder in the company overall, with 11.69% or 5.15 million shares.

The company is covered by Noel Atkinson of Clarus Securities and Chris Thompson of eResearch. Newsletter writer Clive Maund also covers the stock.

It has a market cap of CA$89.01 million with 44 million shares outstanding, with 27.3 million shares free-floating. It trades in the 52-week range of CA$2.18 and CA$1.01.

Disclosures:

1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Data Communications Management Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures for eResearch, Data Communications Management Corp., March 10, 2023

ANALYST ACCREDITATION

eResearch Analyst on this Report: Chris Thompson CFA, MBA, P.Eng. Analyst Affirmation: I, Chris Thompson, hereby state that, at the time of issuance of this research report, I do not own common shares, share options, or share warrants of DATA Communications Management Corp. (TSX:DCM).

eRESEARCH DISCLOSURE STATEMENT

eResearch is engaged solely in the provision of equity research to the investment community. eResearch provides published research and analysis to its Subscribers on its website (www.eresearch.com), and to the general investing public through its extensive electronic distribution network and newswire agencies. eResearch makes all reasonable efforts to distribute research material simultaneously to all of its Subscribers. eResearch does not manage money or trade with the general public, provides full disclosure of all fee arrangements, and adheres to the strict application of its Best Practices Guidelines. eResearch accepts fees from the companies it researches (the “Covered Companies”), and from financial institutions or other third parties. The purpose of this policy is to defray the cost of researching small and medium-capitalization stocks which otherwise receive little or no research coverage.

DATA Communications Management Corp. paid eResearch a fee to have it conduct research and publish reports on the Company for one year.

To ensure complete independence and editorial control over its research, eResearch follows certain business practices and compliance procedures. For instance, fees from Covered Companies are due and payable before research starts. Management of the Covered Companies is sent copies, in draft form without a Recommendation or a Target Price, of the Initiating Report and the Update Report before publication to ensure our facts are correct, that we have not misrepresented anything, and have not included any non-public, confidential information. At no time is management entitled to comment on issues of judgment, including Analyst opinions, viewpoints, or recommendations. All research reports must be approved, before publication, by eResearch’s Director of Research, who is a Chartered Financial Analyst (CFA).

All Analysts are required to sign a contract with eResearch before engagement and agree to adhere at all times to the CFA Institute Code of Ethics and Standards of Professional Conduct. eResearch Analysts are compensated on a per-report, per-company basis and not based on his/her recommendations. Analysts are not allowed to accept any fees or other considerations from the companies they cover for eResearch. Officers, analysts, and directors of eResearch are allowed to trade in shares, warrants, convertible securities, or options of any of the Covered Companies only under strict, specified conditions, which restrict trading 30 days before and after a Research Report is published.

Source: Clive Maund  (3/22/23)

In light of the high-volume advance that went from February to earlier this month, technical analyst Clive Maund takes a look at Data Communications Management Corp.’s 3-month chart to tell you why he believes it is a Buy.

Superficially, after such a big advance, it might be thought that a top is forming, but this pattern has all the attributes of a bull Flag — the persistent heavy volume on the steep advance has been followed by a marked dieback as it has traded sideways, the Accumulation line has held up well, and the trading range can be seen to be tracking within a slightly downsloping parallel trend channel, in other words, a bull Flag.

This implies that the pattern will soon resolve into another powerful upleg that could very well be as big as the first upleg. Note the large bullish “dragonfly doji” that occurred about five days into the Flag, whose intraday low so far marks the low for the pattern.

Data Communications Management is therefore rated an immediate strong speculative Buy, and a stop may be placed beneath the lower boundary of the Flag just in case this interpretation is proven incorrect.

Data Communications Management’s website.

Data Communications Management Corp. closed for trading at CA$2.02, $1.48 at 3.30 pm EDT on March 21, 2022.

This article was originally published on March 21, 2023, at 3.40 pm EDT at clivemaund.com

CliveMaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Disclosures:
1) Clive Maund: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Data Communications Management Corp. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Source: Darren Odell  (3/15/23)

This Australian company, which is experiencing sales momentum and attracting defense contractors’ attention, also is a takeout target, noted a Peloton Capital report.

DroneShield Ltd. (DRO:ASX; DRSHF:OTC) will be operating cash flow positive by year-end and “is an acquisition target,” purported Peloton Capital analyst Darren Odell in a March 9 research note.

With respect to achieving this cash goal, the Australian counterdrone products and solutions company has the following many factors working in its favor, Odell wrote.

1) DroneShield recently raised AU$29.4 million (AU$29.4M) through its stock purchase plan resulting from the AU$10.9M placement last month.

“The recent capital raise has provided DroneShield the ability to build inventory in anticipation of material contracts (and fulfill smaller contracts faster) that are expected to close, in the short to medium term,” wrote Odell.

2) DroneShield recently landed two contracts totaling AU$22M.

3) The company has a robust AU$200M sales pipeline consisting of multiple contracts, each worth more than AU$10. Peloton Capital expects DroneShield to close three large and several smaller deals this year.

“Our DroneShield valuation to AU$0.84 is based on increased confidence on the closure of larger contracts in 2023 and beyond,” wrote Odell.

Compared to Peloton’s AU$0.84 target price, DroneShield’s current share price is about AU$0.335. The company is a Buy.

4) Existing contracted customers in the Five Eyes countries will likely buy more products from DroneShield.

5) The U.S. Department of Defense recommends DroneShield.

6) The Russia-Ukraine war has heightened interest in products like those sold by DroneShield.

Attractive to Potential Buyers

With respect to DroneShield likely being acquired, Odell indicated the following factors support the belief it will happen.

1) One of DroneShield’s shareholders, owning about a 5% interest, is Epirus, a California-based unmanned aerial vehicle firm.

2) Private equity backs DroneShield.

3) The U.S. government recommends DroneShield.

4) Global defense contractors have taken note of DroneShield and its recent contracts.

Disclosures:
1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: DroneShield Ltd. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of DroneShield Ltd., a company mentioned in this article.

Disclosures For Peloton Capital, DroneShield Ltd., March 9, 2023

This report is provided by Peloton Capital Pty Ltd (Peloton) (ABN 22 149 540 018, AFSL 406040) and is general in nature. It is intended solely for the use of wholesale clients, within the meaning of the Australian Corporations Act 2001. This report must not be copied or reproduced, or distributed to any person, unless otherwise expressly agreed by Peloton. This document contains only general securities information or general financial product advice. The information contained in this report has been obtained from sources that were accurate at the time of issue, including the company’s ASX releases which have been relied upon for factual accuracy. The information has not been independently verified. Peloton does not warrant the accuracy or reliability of the information in this report. The report is current as of the date it has been published.

In preparing the report, Peloton did not take into account the specific investment objectives, financial situation or particular needs of any specific recipient. The report is published only for informational purposes and is not intended to be personal financial product advice. This report is not a solicitation or an offer to buy or sell any financial product. Peloton is not aware whether a recipient intends to rely on this report and is not aware of how it will be used by the recipient. Before acting on this general financial product advice, you should consider the appropriateness of the advice having regard to your personal situation, investment objectives or needs. Recipients should not regard the report as a substitute for the exercise of their own judgment.

Peloton may assign ratings as ‘speculative buy’, ‘buy’ and ‘sell’ to securities from time to time. Securities not assigned are deemed to be ‘neutral’. Being assigned a ‘speculative buy’, ‘buy’ or ‘sell’ is determined by a security total return potential, with the total return potential being aligned to the upside or downside differential between the current share price and the targeted price within a specified time horizon, if deemed appropriate. The views expressed in this report are those of the analyst/author named on the cover page. No part of the compensation of the analyst is directly related to inclusion of specific recommendations or views in this report. The analyst/author receives compensation partly based on Peloton revenues as well as performance measures such as accuracy and efficacy of both recommendations and research reports.

Peloton believes that the information contained in this document is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made at the time of its compilation in an honest and fair manner that is not compromised. However, no representation is made as to the accuracy, completeness or reliability of any estimates, opinions, conclusions or recommendations (which may change without notice) or other information contained in this report. To the maximum extent permitted by law, Peloton disclaims all liability and responsibility for any direct or indirect loss that may be suffered by any recipient through relying on anything contained in or omitted from this report. Peloton is under no obligation to update or keep current the information contained in this report and has no obligation to tell you when opinions or information in this report change.

Peloton does and seeks to do business with companies covered in research. As a result, investors should be aware that the firm may have a conflict of interest which it seeks to manage and disclose. Peloton and its directors, officers and employees or clients may have or had interests in the financial products referred to in this report and may make purchases or sales in those the financial products as principal or agent at any time and may affect transactions which may not be consistent with the opinions, conclusions or recommendations set out in this report. Peloton and its Associates may earn brokerage, fees or other benefits from financial products referred to in this report. Furthermore, Peloton may have or have had a relationship with or may provide or has provided, capital markets and/or other financial services to the relevant issuer or holder of those financial products.

Specific Disclosure: Peloton Capital raised $40.3m for DroneShield (DRO), announced March 2023, for which it earned fees.

Specific Disclosure: The analyst does hold securities in DRO.

Specific Disclosure: The report has been reviewed by DRO for factual accuracy.

Specific Disclosure: As at 9th March, Peloton Capital held c.1m DRO shares and 15m call options. This position may change at any time and without notice, including on the day that this report has been released. Peloton and its employees may from time-to-time own shares in DRO and trade them in ways different from those discussed in research. Peloton Capital may arrange the buying and selling securities on behalf of clients.

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Source: Chris Thompson  (3/14/23)

The strategic merger between these two Canadian entities should enhance the acquirer’s “capabilities and growth potential,” noted an eResearch Corp. report. 

Data Communications Management Corp. (DCM:TSX; DCMDF:OTCQX) agreed to acquire the Canadian operations of R.R. Donnelley & Sons, called Moore Canada (RRD Canada), for CA$123 million (CA$123M), which should provide beneficial synergies, reported eResearch Corp. analyst Chris Thompson in a March 10 research note. The transaction should close in Q2/23.

“We believe the deal will be accretive to Data Communications Management’s financial profile as it accelerates [the company’s] revenue and EBITDA growth and diversifies its revenue base,” Thompson wrote. “It could help accelerate sales growth, lower some organizational costs, and enhance operational efficiency, which could lead to an improved overall financial performance.”

In other news, the analyst reported Data Communications reported strong preliminary full-year 2022 (FY22) financial results, noteworthy for higher-than-expected revenue as well as year-over-year (YOY) increases in revenue, gross profits, and EBITDA.

Boosts to Target Price

Thompson highlighted that the merger and strong FY22 are “positive for the company valuation, according to our model.” Incorporating last year’s revenue increases eResearch’s target price on Data Communications to CA$4.59 per share, whereas accounting only for the acquisition takes it to CA$5.92 per share. Combining both raises it to CA$6.02 per share.

Data Communications is rated Buy.

The private equity investment firm, however, plans to keep its target price as is, now CA$4.50 per share, until the merger closes or final FY22 financial results are released.

Compared to the current CA$4.50 per share target price, this provider of marketing and business communication solutions is currently trading at about CA$2.06 per share, noted Thompson. This price difference implies significant potential gains for investors. Data Communications is rated Buy.

Impacts of the Deal

Thompson highlighted the acquisition should boost Data Communications’ capabilities and growth potential given RRD Canada’s “highly complementary” operating model and the expectation RRD Canada will bring online more products, services, and technological abilities.

RRD Canada provides print and print-related services to thousands of Canadian customers through 10 locations and with 1,000 employees. Last year, RRD generated about CA$250M in revenue. With the merger, Data Communications will be able to offer RRD’s services and solutions to its existing customers and take advantage of cross-selling opportunities.

According to the terms of the share purchase agreement, Data Communications will acquire three RRD Canada-owned sites at an implied value of about CA$30M. After closing, Data Communications plans to pursue a sale and leaseback agreement for each of these locations.

The acquisition would take Data Communications’ 16 locations to 21 and its number of enterprise clients to 400-plus from 250. These additional clients would add scale, for instance, to Data Communications’ marketing workflow technology platform, DCMFlex, and its digital asset management platform, ASMBL.

Snapshot of 2022 Finances

For FY22, Data Communications reported preliminary revenue of between CA$270M and CA$274M. This is higher than eResearch’s estimate of $265.3M and reflects a 15–16.5% increase over FY21 revenue.

Similarly, gross profit last year was between 30.5% and 31%, up 20–21% from that in FY21. FY22 EBITDA was between CA$35.5M and CA$36.5M, a 41–45% YOY increase.

Total debt, net of cash, down dropped about 35% from 2021’s amount. Data Communications plans on paying for the acquisition of RRD entirely through committed credit facilities noted Thompson.

Data Communications is scheduled to release full financial FY22 results on March 21, 2023, and hold an investor call and webcast the next day.

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Disclosures:

1) Doresa Banning wrote this article for Streetwise Reports LLC as an independent contractor. They or members of their household own securities of the following companies mentioned in the article: None. They or members of their household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Data Communications Management Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

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Disclosures for eResearch, Data Communications Management Corp., March 10, 2023

ANALYST ACCREDITATION

eResearch Analyst on this Report: Chris Thompson CFA, MBA, P.Eng. Analyst Affirmation: I, Chris Thompson, hereby state that, at the time of issuance of this research report, I do not own common shares, share options, or share warrants of DATA Communications Management Corp. (TSX:DCM).

eRESEARCH DISCLOSURE STATEMENT

eResearch is engaged solely in the provision of equity research to the investment community. eResearch provides published research and analysis to its Subscribers on its website (www.eresearch.com), and to the general investing public through its extensive electronic distribution network and newswire agencies. eResearch makes all reasonable efforts to distribute research material simultaneously to all of its Subscribers. eResearch does not manage money or trade with the general public, provides full disclosure of all fee arrangements, and adheres to the strict application of its Best Practices Guidelines. eResearch accepts fees from the companies it researches (the “Covered Companies”), and from financial institutions or other third parties. The purpose of this policy is to defray the cost of researching small and medium-capitalization stocks which otherwise receive little or no research coverage.

DATA Communications Management Corp. paid eResearch a fee to have it conduct research and publish reports on the Company for one year.

To ensure complete independence and editorial control over its research, eResearch follows certain business practices and compliance procedures. For instance, fees from Covered Companies are due and payable before research starts. Management of the Covered Companies is sent copies, in draft form without a Recommendation or a Target Price, of the Initiating Report and the Update Report before publication to ensure our facts are correct, that we have not misrepresented anything, and have not included any non-public, confidential information. At no time is management entitled to comment on issues of judgment, including Analyst opinions, viewpoints, or recommendations. All research reports must be approved, before publication, by eResearch’s Director of Research, who is a Chartered Financial Analyst (CFA).

All Analysts are required to sign a contract with eResearch before engagement and agree to adhere at all times to the CFA Institute Code of Ethics and Standards of Professional Conduct. eResearch Analysts are compensated on a per-report, per-company basis and not based on his/her recommendations. Analysts are not allowed to accept any fees or other considerations from the companies they cover for eResearch. Officers, analysts, and directors of eResearch are allowed to trade in shares, warrants, convertible securities, or options of any of the Covered Companies only under strict, specified conditions, which restrict trading 30 days before and after a Research Report is published.