Tag Archives: PTG

October 2020 Update – $OSS.v, $ISDR, $PSD.to, $STC.v, $FTG.to, $PTG.to, $VLN.to

Here is a quick update for the month of October 2020 for some names mentioned on the blog.

  • OneSoft Solutions ($OSS.v)
    • Announced first new customer win in 18 months
    • Pretty big deal given the long wait
    • Still looking for more customer wins in order to move the share price
  • Issuer Direct ($ISDR)
    • Reported Q3 and was really well yoy
    • Share price has doubled since I purchased and is no longer cheap on trailing numbers
    • I still see potential in the business
  • Pulse Seismic ($PSD.to)
    • EdgePoint picked up 3.1 mil shares during a private transaction. They increased their ownership to 24.60%, up from 18%.
    • This is not anywhere near their top 10 in position size, so somewhat of a non-event.
  • Sangoma Technologies Corp ($STC.v)
    • Reported fiscal Q4
      • Good quarter and encouraging outlook
      • Beat previous guidance and issued new 2021 guidance
        • EV/REV
        • EV/EBITDA
  • Firan Technology ($FTG.to)
    • Reported numbers and held a conference call
      • Numbers were better than I would have guessed
        • Managing the covid precautions well
      • Have 3.1 mil in PPP
      • Backlog of 47M of which 26M due in fiscal Q4
        • Likely won’t deliver all though
    • Polar Asset Management picked up some more shares
      • They now own 13% of the outstanding
      • Non-event to me as this isn’t a top 10 holding for them.
  • Pivot Technology Solutions ($PTG.to)
    • Shareholders officially approved the arrangement for $2.60
  • Velan ($VLN.to)
    • Reported numbers and held a conference call
      • Quarter was a little weaker than I anticipated
      • Some additional costs with forex swings, land clean up with sale of plant, continued restructuring,
      • Took over 4 mil in wage subsidy which would have made things worse
    • Good news
      • V20 plan progressing well and seeing some benefit to the business ahead of schedule
      • Backlog is up as book to bill was over 1.2
      • Gross margins are steady
      • Most important to long term – the company now has it’s first independent chairman who has lots of industry experience. This is the Velan family moving to independent leadership. I’m a big fan.

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Pivot Technology Solutions – $PTG.to

I wrote about Pivot Technology Solutions way back in 2014. It’s actually a good read as you get to experience some of my transformation as an investor. I couldn’t get over the customer concentration and low margin profile and ended up selling. I ended up selling my position in mid 2015 to early 2016 to buy some Sangoma Technologies ($STC.v), Command Centre ($CCNI – now part of HireQuest) and some O&G services companies in 2016. Turned out to have mixed results. I did well with the O&G services trade, did OK with Command Centre and pretty good with Sangoma.

Let’s take a look at Pivot with fresh eyes.

Background & 5yr chart

Pivot Technology Solutions, Inc. provides IT services and solutions in the United States and Canada. It provides IT solutions and system integration services that include IT solutions focused on enterprise infrastructures, such as systems, storage, security, networking, and compliance; and IT services that enable businesses to optimize their IT infrastructure and enhance mission-critical processes. The company also offers IT solutions to federal, state, county, and local municipalities with a focus on public safety; and IT hardware, software, and professional services to enterprise, public sector, and educational customers. In addition, it provides advisory, implementation, and maintenance services of enterprise data centers; centered on private cloud; and mobility and managed services. Further, the company provides technical solutions and various other related services, as well as staffing and cloud expertise services to governments, the public sector, and commercial enterprises. Pivot Technology Solutions, Inc. was founded in 2010 and is headquartered in Markham, Canada.

Pivot also pays a big dividend. It’s currently yielding 9.2%.

Business Performance

The company switched to reporting in $CAD from $USD in Q1 of 2020. Since all my previous data was in USD, I took the reported results in $CAD and converted them to $USD to make the comparison easier. The exchange rate was quite volatile for Q1 2020, so numbers may not be a great representative of reality. But hey, it’s a free site what else do you want?

As you can see this isn’t a high margin business and relies on high sales/volume to generate cash. The decrease in sales is mostly related to lower revenue from major customers, although non-major customers usually means higher gross margins. 2018 and 2019 has 70.1% and 80.9% of revenue from non-major customers.

Despite the challenges the company has consistently generated cash on an annual basis. I The current dividend seems well supported.


Here are some more operating ratios.

Given the nature of the business (primarily a reseller who is technology agnostic), managing working capital is crucial. The CCC is how I like to look at operational capital use.

The company is focused on supporting clients from start to finish with a full suite of products as well as consulting, integrating and supporting them. Their services side of the business is stickier. It’s the product sales that will move the needle significantly, unless they acquire a company in the services side of the business.


Balance Sheet

The company employs debt, mostly in the form of short term obligations. The company measures its debt obligations as stated below.

“Adjusted Debt” is defined as current liabilities, plus long‐term other financial liabilities, less lease obligations and current assets.

I have left my traditional measure of debt:ebtida for comparison purposes. The good news is that the current debt load seems manageable.

Ownership & Compensation

The CEO has a salary of 450k and had total compensation of almost 800k. Below is what compensation looks like over the last 3 years. He has been in place since 2016.

The CEO owns 0.5% of the company. Two directors collectively own 6.5% of the company.


Here is the valuation of the business today. Cheap on a market cap basis, but not nearly as cheap once debt is included.

Growth in the business will come from some organic growth, overall IT spend, and acquisitions. Previous acquisitions have been integrated well and haven’t blown up the balance sheet.

Covid Impact

So far the business has been somewhat modestly by the lockdowns. Some businesses have pulled back spending and others needed to invest to support their staff working remotely.


If you are dividend focused investor, I think Pivot is worth a close look. They have been through some major customer spend reduction and have continued to pay a dividend and generate cash.

Anyone ever look at Pivot before?



*the author does not have a  position in Pivot Technology Solutions

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Evolution of a “Value Investor”

This post will not involve in depth company analysis, instead I wanted to catalog some things that have changed with my philosophy when it comes to picking stocks to invest in.  Recently, some good news was released on one of my top holdings that clearly displays my change.

I started purchasing Pivot Technology Solutions (PTG.v) in the summer of 2014.  The idea behind the investment was a cheap company with decent ROIC (though admittedly low margin), capable management and a large overhang in the capital structure.  There was a large amount of preferred shares outstanding that I felt were preventing the company from being properly valued by the market. The common shares are illiquid and well under $1, making it something that many institutions would ignore. Given who owned the common and preferred shares, it would make sense to do some sort of conversion of the preferred to common to clean up the capital structure. Management had mentioned several times that they had intended to do so.

I continued to purchase shares throughout the fall of 2014 as the company executed on operational promises to investors. There was still mention of some sort of conversion in the future. I was happy with management running the business and the focus on operations. I figured the conversion eventually happened whether organically or being forced by some sort of activist once the value of the business was made apparent.

At the beginning of March 2015, the company announced some good news:

  • company officially initiated a process to convert the preferred shares to common shares
  • announced a normal course issuer bid to repurchase. though many company’s announce this and don’t follow through
  • initiated a quarterly dividend starting in Q3 2015, annual yield at today’s price is around 10%

Old vs. New

The previous version of myself would have simply sold the shares on the good news and likely plowed the winnings into something that was “cheap” (likely one of my losers). I would put money into something the market doesn’t understand and likely a dinky little company that abuses the share price and struggles to execute. I would expand the numbers of company’s I own, which has two effects on the portfolio.

  1. Another company for me to keep tabs on, therefore increasing the demand on my time to maintain an understanding of yet another business with yet another management team.
  2. Increasing the number of company’s in the portfolio reduces the effect that the winners have on the portfolio as a whole.

The new version of me took a few days to reflect and reassess. I reviewed the business, the management team and what I see as the market’s expectation going forward. I have concluded that shares are still cheap, and I have recently increased my position.

Why would I sell a cheap company that is growing and shouldn’t need to dilute shareholders in the future?


Disclosure: The author is long PTG.v

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