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Nov
25
Quorum Information Technologies has doubled in size and is expanding quickly into USA
Posted by: Gerry Wimmer
11/25/2018
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TOP IDEAS: Latest acquisition makes Quorum Information Technologies Inc. (TSXV: QIS) twice as big, with more SaaS solutions to serve the auto dealership market in North America. The stock is up 215% since first recommended.




Investorfile's share price accumulation target of $0.40 for Quorum Information Technologies was reached on August 17, 2015. For the record, we do not revise share price targets for our Investorfile Top Ideas - 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.


The Investorfile blog has not posted an update on our Top Ideas' stock pick Quorum Information Technologies Inc. in over 18 months. But what has happened since our last post is all good and the share price is up 215% since we first recommended the Company's shares as a small cap value investment opportunity (See: Quorum Information Technologies delivers value for auto dealerships and small cap investors).

Quorum Information Technologies Inc. (TSXV: QIS - $0.63) develops, markets, sells, implements and supports its proprietary enterprise management software solution called XSELLERATOR for auto dealerships using a Software-as-a-Service (SaaS) pricing model. XSELLERATOR is a comprehensive dealership and customer management solution (DMS) that automates, integrates and streamlines every department within an auto dealership to save on costs while generating more services revenue for the auto dealership. A key competitive advantage of XSELLERATOR as a fully integrated DMS system is its embedded Customer Relationship Management (CRM) system. Today Quorum's XSELLERATOR software product generates recurring revenues from a customer base of 359 auto dealership locations, the majority of which are located within Canada.

Based on its successful foundation in the DMS market, Quorum's Management team has begun to embark on an aggressive growth strategy in order capture the lion’s share of auto dealerships' expenditures for both operational and sales & marketing software tools. As such, last month the Company made a major acquisition and acquired DealerMine Inc.

Headquartered in Saint John, New Brunswick, Canada, DealerMine is a fast-growing company whose key products and services for auto dealerships include Service Customer Relationship Management ("CRM") software,Sales CRM software and Business Development Centre ("BDC") / call centre services. Eighty-five percent of DealerMine customers’ are auto dealerships in Canada, and the remaining 15% are U.S. auto dealerships.

Quorum’s acquisition of DealerMine is transformational. The Company now has a annual revenue base of over C$27 million (doubled in size) serving a customer base of 860 auto dealerships throughout Canada and USA. The Company has stated that the EBITDA and cash flow from the DealerMine acquisition will be immediately accretive to Quorum’s financial results.

We see the acquisition of DealerMine as a key strategic move that will help Quorum form a true full-service software and services company for the automotive retail sector across North America.

In addition to this acquisition, Quorum has made a strategic decision and significant investments to expand its DMS business into the USA. Because of this, the Company now has a dedicated U.S. sales team and, in the last two months, has sold the XSELLERATOR DMS software to three new dealerships located in USA while building a qualified DMS sales pipeline of 25 dealerships in the USA to date. We see Quorum's dedication to grow in the U.S. market (internally and through acquisitions) as having many long-term benefits and, also, will make the Company an attractive takeover target.

At Investorfile we acknowledge that the stock price of Quorum has performed well for small cap investors who acted on the blog's initial recommendation. That said, we still feel that the Company is in the early stages of a multi-year growth trajectory. Given that Quorum is now a much bigger company with a very strong recurring revenue base we feel strongly that more institutional investors and analysts will be engaged in this story. This could have a very positive impact on the stock price.

The Company has approximately 60.3 million shares outstanding.

Quorum Information Technologies website: www.quorumdms.com

Author Ownership Disclosure: TSXV: QIS - Yes


Read Disclaimer:

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 is not engaged in an investor relations agreement with Quorum Information Technologies Inc. nor has it received any compensation from Quorum Information Technologies Inc. for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Quorum Information Technologies Inc. through open market transactions and for investment purposes only.

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Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.