IDEAS: RDM Corporation (TSX: RC) delivers on earnings and dividends. The stock
is up 247% and major catalysts are still to come.
share price accumulation target of $1.35 for RDM Corporation was reached on
November 22, 2012. For the record, we do not revise share price targets for our
Investorfile Top Ideas Ė Small Cap Value Stocks. We have positioned our blog to
be one of the first providers of a pragmatic perspective of a small cap company
stock's potential worth, where there may be uncovered value that has been
largely overlooked by the investment community.
we admit, our blog posts for RDM Corporation (TSX: RC - $3.05) sound like a
broken record. But that has turned out to be a good thing for small cap
Corporation is a provider of Remote Deposit Capture (RDC) technology:
specialized software and hardware products for electronic payment processing of
digital images of cheques. RDM payment solutions are utilized by four of the
top 10 financial institutions in the United States. The Company
processes over $600 billion in annual payments and serves 32% of the top 100
Fortune 500 companies including brokerage firms, big box retailers, healthcare
and insurance providers, and government entities in the USA.
Investorfile blog named RDM Corporation (RDM) to its list of Investorfile's Top
Ideas Small Cap Value Stocks in January 2012 (See Ė RDM Corporation: Cash-rich
small cap turnaround, offers value and opportunity.) At that time we were the
stock's only real cheerleader. Later that same year, with the stock price up
48%, we cheered a little louder with another blog post (See - Two million more
reasons for investors to like RDM Corporation.) The following year we continued
in our pursuit to drive investor attention to this Company. At that point the
stock was up 88% when we wrote this RDM blog post in 2013 (See - Once a
turnaround; now a growth story: More investors should tune into RDM
Corporation.) It was in 2014 we wrote our next RDM blog post. The stock was
trading 161% higher and the Company was still generating financial results
worthy of more investor attention (See - For growth investors: What's not to
like about RDM Corporation.) In that post were we concluded that the
appreciation potential for RDMís stock price is stronger than ever.
we feel the same and RDMís stock is up 247% from our first blog post. Here's
why the Company's share price could continue its rise:
1. Last week RDM reported its fiscal 2015 Q1
results. The Company's adjusted EBITDA improved 30% to US $1.38 million and net
income rose 44% to US $1.12 million or US $0.05 per share. It ended Q1 fiscal
2015 with cash totaling US $23 million (US $1.06 per share). The Company boosted
its quarterly dividend payout by 50%. RDMís management has said they continue
to see evidence of strong market acceptance of their products and services and
that their sales pipeline remains strong.
2. RDMís functional currency is the US
dollar. Currently all of the Company revenues are generated in US dollars from
US-based customers. Based in Waterloo,
Ontario, RDM operating costs are
in Canadian dollars, thus creating favourable margins.
3. The Company is attracting a wider investor
audience. Twelve months ago no
investment houses provided research coverage on RDM. Today there are four
analysts, all which rate the Company's stock as a buy.
our points above, the biggest catalyst for the stock's appreciation potential
in 2015 is the utilization of the Company's cash for acquisition(s). Otherwise
RDM itself could be acquired in a takeover bid. Either way shareholders should gain big.
RDM has approximately 21.6 million shares
RDM Corporation website: www.rdmcorp.com.
Author's Ownership Position TSX: RC - Long
This article is for informational purposes only. This article is based on the
author's independent analysis and judgment and does not guarantee the
information's accuracy or completeness. The information contained in this
article is subject to change without notice, and the author assumes no
responsibility to update the information contained in this article. The
information contained within this article should not be construed as offering of
investment advice. Those seeking direct investment advice, should consult a
qualified, registered, investment professional. This is not a direct or implied
solicitation to buy or sell securities. Readers are advised to conduct their
own due diligence prior to considering buying or selling any stock.
Investorfile.com is not engaged in an investor relations agreement with RDM
Corporation nor has it received any compensation from RDM Corporation for the
preparation or distribution of this article.
The author of this article has acquired and may trade shares of RDM Corporation
through open market transactions and for investment purposes only.