Tag Archives: DWSN

October 2021 Update – $REPH, $PSD.to, $ISV.to, $STC.v, $FTG.to, $VLN.to, $SYZ.to, $FRII.to, $RELL, $URB/A.to, $KUT.v, $DWSN

TIKR

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Thoughts on Market Activity

Nothing really eye opening here. Lots of inflation talk out there. Markets near all time highs.

What I’m Reading

  • I’ll be on the platform in another 5 weeks for a powerlifting meet. I’ve been focusing on training and building my garage gym.

Posts this month

  • MCR Update
  • O&G Activity – USA

Developments on Companies Mentioned

  • Recro Pharma – $REPH
  • Pulse Seismic – $PSD.to
    • Reported Q3 2021
      • Results were good
      • They have paid off all the long term subordinated debt
      • Issued a special dividend of 0.04
      • Started regular quarterly dividends of 0.0125
    • Announced NCIB for up to 10% of float
    • Here is the companies latest presentation
  • Information Services Corp – $ISV.to
    • CEO is leaving at end of Jan 2022 for personal reasons and the current CFO will become CEO
  • Sangoma Technologies Corp – $STC.v
    • They have graduated from the venture to the TSX starting Nov 1, 2021
  • Firan Technology – $FTG.to
    • Reported Q3 2021
      • Still seeing slow grind higher in activity in commercial aerospace
      • Current and immediate near future valuation looks fair, upside looks to be if activity gets back to pre-pandemic levels in the next couple of years
  • Velan – $VLN.to
    • Reported fiscal Q2 2022 and held a conference call
      • No questions on the call
    • Results were good
      • They look to be turning around from an operational standpoint
    • CEO transition
      • I wasn’t expecting this though I’m not surprised
    • I continue to hold my position
  • Sylogist – $SYZ.to
    • Small acquisition
      • Valuation and earn out look to be quite reasonable although somewhat small top line in the context of their entire business
      • Still I think it shows that they continue to focus on M&A as promised
  • Freshii – $FRII.to
    • Announced acquisition of Natura
      • 9.6 mil EV
      • 19 mil in ttm rev
        • 0.5x ttm sales
      • Buying 60% for 5.7mil with some additional earnout based on performance in 2022
      • Right to buy the remaining 40% through Q1 2025
  • Richardson Electronics – $RELL
    • Reported Q1 fiscal 2022
      • Revenue was way higher and the highest in 11 years
      • Demand seems strong
    • I continue to monitor
  • Urbana Corp – $URB/A.to
    • The company bought 600k shares privately from EdgePoint
    • The NAV has been above $7
  • RediShred Capital – $KUT.v
    • Filed a preliminary base shelf prospectus
      • Up to 25mil for 25 months once effective
  • Dawson Geophysical – $DWSN
    • Though I stopped following DWSN closely they announced that the Wilks Brothers LLC wants to purchase them for $2.34 per share
    • And the Attorney General of Louisiana released this
    • This will be interesting to watch

Long – $PSD.to, $VLN.to, $FRII.to, $STC.v, $URB/A.to, $KUT.to

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May 2021 Update – $CSW/A.to, $OSS.v, $REPH, $ISDR, $PSD.to, ISV.to, $STC.v, $VLN.to, $VMD.to, $SYZ.to, $MCB.to, $FRD, $FRII.to, $MTLO.v, $DWSN, $FXC.to, $PZA.to, $MCR.to

TIKR

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Thoughts on Market Activity

Another busy month.

This month continued the debate on whether or not the current inflation readings are transitory or more permanent. I’m not smart enough to know. Most seem to be over the worry about covid in the first world.

Personally, my portfolio took it on the chin this month. Bigger holdings in $STC.v and $VMD.to are the main culprits. I continue to believe in both businesses over the long term so I continue to hold. I’m still finding some interesting ideas, but they are more cyclical or neglected with lots of uncertainty.

Posts this month

Developments on Companies Mentioned

  • Corby Spirit and Wine Limited – $CSW/A.to & $CSW/B.to
    • Reported fiscal Q3 2021
      • In line with expectations
        • Lots of lockdowns so in person dining is hit
        • But people still drinking
        • At about 4.8% yield
          • They’ve have issued special dividends before, as things recover and cash builds on the balance sheet, they may do it again as they now have almost $3 per share in cash
  • OneSoft Solutions – $OSS.v
    • Reported Q1
      • A little below my expectations
      • Last year had a large amount of data uploaded which led to a very tough comp
      • Still holding
  • Recro Pharma – $REPH
    • Reported Q1 2021
      • Results were better than expected
      • They provided full year guidance and the market reacted well
      • the business seems to have bottomed and having the visibility for full year results is a positive
  • AWM announced an initial position
    • 4.8 mil shares
    • I’m assuming they picked some up during the recent issuance
    • Can’t find a ton of info on the fund, but this does not look like a top 10 holding for them based on the last round of 13F’s
  • Issuer Direct – $ISDR
    • Reported Q1
      • Rev up 32%
      • Profitability up yoy and flatish from Q4
      • Outlook was positive
  • Pulse Seismic – $PSD.to
    • Announced a data license agreement for 17mil
      • Immediate rev of 7.3mil
      • Remaining 9.7mil by April 15, 2022
      • YTD rev (17.2) is way ahead of full year 2020 rev
  • Information Services Corp – $ISV.to
    • Reported Q1
      • Better than expected
      • The real estate market in Sask was stronger than I expected
      • It will be interesting to see what the rest of the year looks like given that the seasonality weak quarters were strong and there may be some demand pulled forward in parts of the business but also other parts (Paragon for example) are being held back due to stimulus
  • Sangoma Technologies Corp – $STC.v
    • Reported fiscal Q3 2021
      • Weaker than expected due to stronger CAD
      • Star2Star integration going fine
      • Not much detail on uplisting at this point
  • Velan – $VLN.to
    • Released fiscal Q4 2021
      • Way weaker than I expected and shares tumbled on the day
        • Production issues in north America from selling the plant earlier than expected in 2020
        • Delays due to covid and supply chain interruptions
      • Backlog is up so it’s nice to see demand for their products
    • Still holding, going to regroup on this one
  • Viemed – $VMD.to
    • Reported Q1
      • A little weaker than I was expecting
      • Guidance was pretty good
      • I really like the adjacent initiatives they have to drive customer value
  • Sylogist – $SYZ.to
    • Reported Q1 2021
      • Was weaker than expected
      • Seems like a mix of currency headwinds and covid lockdowns
      • I still follow and am curious if they can find some more acquisition candidates
  • McCoy Global – $MCB.to
    • Reported Q1 2021
      • Was weak as expected
      • Continue to develop their product suite to support a fully automated TRS (Tubular Running Services) for end of 2022
  • Friedman Industries – $FRD
    • Ault Global Holdings announced a 416,000 share position or 6%
      • They have gone activist on company’s in the past and this will be interesting to watch
    • Provided Q4 guidance and new faciility
      • Expect earnings in Q4 to be 9.5-10.5 mil and EPS $1.37-1.52
        • The most profitable in history
      • Steel prices have been moving if you haven’t noticed
      • New facility
        • 21 mil cost
        • Estimated 3 million ton capacity
      • New equipment in Decatur
        • Started in May 2021
      • Shares have performed really well – wish I have bought some
  • Freshii – $FRII.to
    • Reported Q1 2021
      • Weak as expected
      • They seem to be gaining some traction with the app and some omnichannel opportunity
      • Q2 will likely be weak as lockdowns in Canada persist, although likely not as weak as Q2 2020
      • Canada is doing well with administering vaccine and many provinces are talking about reopen, FRII now has to demonstrate how they can succeed in a more normal environment
  • Martello Technologies Group Inc – $MTLO.v
    • Launched cloud-based mulit0tenant Microsoft 365 monitoring platform
      • Sounds like this will be meaningful to revenue in 2022
  • Dawson Geophysical – $DWSN
    • Reported Q1 2021
      • Weak as expected though better sequentially
      • Maybe see a bounce in activity if oil remains at these levels
    • I’ve stopped following the company closely as the shares are continuing to trade above NCAV
    • I’m going to stop providing updates from this point on as this is really just a NCAV play
  • FAX Capital – $FXC.to
    • Announced Q1
      • Book value up 6% sequentially and 24% yoy
    • Held AGM virtually – some interesting points
      • Approved the amended voluntary measures by-law
        • This gives them a little more flexibility on positions allowing for up to 2 holdings to a max of 25% of assets (each)
      • They are happy with the pace of cash deployment
      • They have monetized two investments which had led to cash on the balance sheet being higher than expected
      • I don’t think I understood the potential they see in Carson Dunlop
        • They gave some additional color on the call which was appreciated
  • Pizza Pizza Royalty Corp – $PZA.to
    • Reported Q1 2021
      • As expected results were quite a bit weaker than last year as there was little to no covid impact in Q1 2020
        • Most of their markets had delivery and pick-up only for the quarter
      • Noted they are looking to grow the restaurant base by 5%
      • The tone on the call was more positive than typical
      • As Canada continues with it’s vaccine program we should see reopen happen slowly
  • Macro Enterprises – $MCR.v
    • Announced Q1 2021 and AGM
      • Confirmed min 250 rev for 2021

Dean

*Long $OSS.v, $ISDR, $PSD.to, $STC.v, $VLN.to, $VMD.to, $MCB.to, $FRII.to, $FXC.to, $MCR.to at time of writing

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April 2021 Update – $OSS.v, $REPH, $ISDR, $PSD.to, $ISV.to, $FTG.to, $XTC.to, $RELL, $MTLO.v, $DWSN, $SVT, $URB/A.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

Thoughts on Market Activity

This month seen a bounce in the markets to some degree. Hearing more and more mention of inflation on conference calls from companies and some larger companies have implemented cost increases due to rising input costs. I am not a macro guy but thinking about how a business will perform with higher input costs feels more prudent than ever. There seems to be a big disconnect on what I hear on Twitter vs. how the indexes are performing. I do consistently hear “it’s a tough market for microcaps” and “these aren’t getting the attention they deserve”. It seems to be a story of what worked in 2020 isn’t working in 2021. Is it a temporary phenomenon or something longer lasting I’m not sure.

On a personal note, my portfolio has been treading water for a few months. Keeping up with the Russel YTD will have to be good enough. I have been deploying into more and more smaller bets as some companies have reached large portions of the portfolio and not sure if the valuations warrant very large positions. This will make it harder to substantially outperform by a wide margin but could lead to less volatility. Also, I’m expecting that the churn in positions will lead me to underperform in the short term.

Posts this month

Developments on Companies Mentioned

  • OneSoft Solutions – $OSS.v
    • Announced another client
      • Nice to see some continued traction
  • Recro Pharma – $REPH
  • Issuer Direct – $ISDR
    • Announced a 1% pledge
      • I like the concept and how ISDR is an entity that gives back to the community
  • Pulse Seismic – $PSD.to
    • Reported Q1 2021 and held AGM
      • 3.8 mil in sales in April
      • They have now booked 77% of the entire year of 2020 rev (although depressed) in the first 4 months
      • I have tried hard to purchase additional shares, but the share price has run away from me
  • Information Services Corp – $ISV.to
    • Filed a shelf prospectus to raise up to 200mil over the next 25 months
      • Interesting development and something to monitor
  • Firan Technology – $FTG.to
    • Reported fiscal Q1 2021
      • Results were impacted by covid from a demand and operational standpoint
      • Trading quite cheap based on trailing numbers with some uncertainty with commercial aerospace returning
  • Exco Technologies – $XTC.to
    • Reported fiscal Q2
      • Results were above my expectations and outlook given was strong
  • Richardson Electronics – $RELL
    • Reported Fiscal Q3
      • Things are looking positive
      • Trading at about NCAV
  • Martello Technologies Group Inc – $MTLO.v
  • Dawson Geophysical – $DWSN
    • Adopted a shareholder rights plan
      • Expires in 2022
      • Not a fan
  • Servotronics – $SVT
    • Released 10-K
      • Not a ton of details that we don’t already know
      • Revs down 10% in 2020
        • ATG down 16% as they are tied to commercial aviation
      • CPG up 34% as they shipped more units
    • Still interesting to follow
  • Urbana Corp – $URB/A.to
    • NAV is slowly creeping up

The author is long $OSS.v, $ISDR, $PSD.to, $URB/A.to

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