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Dec
16
Investorfile top pick performer in 2018 may repeat gains in 2019
Posted by: Gerry Wimmer
12/16/2018
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Up 64% from last year, Sangoma Technologies (TSXV: STC) is a top pick again for 2019. Other stock predictions to perform next year include Novra Technologies (TSXV: NVI) and Destiny Media Technologies (TSXV: DSY).

This is the eighth year that we continue with our annual tradition each December: When the Investorfile blog becomes a predictor of a few investment themes for our current list of Top Ideas that may have a very positive impact as a percentage gainer on the stock price for the upcoming year. Therefore, they become our top picks. While our track record for our annual top picks is not always perfect, our record shows we tend to be more right than wrong in generating investment gains over the following twelve months. That said, this list does not eliminate the potential for our remaining Top Ideas to become top performing stocks as well in 2019.

Of note: Sangoma Technologies returns as an Investorfile top pick for the second straight year.

Investorfile predictions for 2019:

1. Our Top Ideas stock that will see its trading multiple expand based on key financial metrics.

Prediction is:
Sangoma Technologies Inc. (TSXV: STC- C$1.23)

Sangoma Technologies delivers Unified Communications solutions for SMBs, Enterprises, OEMs, Carriers and service providers. The Company’s scalable offerings include both on-premises and cloud-based phone systems.

The Company is experiencing significant growth, both organic and through acquisitions. Management has provided financial guidance for fiscal 2019: Revenues at C$100 million and EBITDA at C$10 million. As a bigger company, we feel the stock could trade higher in value in 2019 to reflect a trading multiple more in line (eg. price to sales) with its peer group of other publicly traded technology companies. Currently, four analysts provide research coverage on Sangoma Technologies with 12-month price targets ranging from C$2.25 to C$2.50 which implies as much as 103% upside from the current stock price level.

Last blog post:
We repeat: Sangoma Technologies is still a strong buy today

2. Our Top Ideas stock that could show significant revenue and profit growth in 2019 as a result of completing the integration of a prior year acquisition.

Prediction is:
Novra Technologies Inc. (TSXV: NVI- C$0.155)

Novra Technologies (the parent company of the Novra Group) is an international technology provider of products, systems and services for the distribution of broadband multimedia content via satellite and hybrid networks. Novra applications' focus includes broadcast video and radio, digital cinema, digital signage and highly reliable data communications.

The Company’s most recent acquisition of a controlling interest in Wegener Corporation makes them a bigger company with a stronger product portfolio and greater operating leverage. The financial benefits of the Wegener acquisition are starting to show promise based on Novra Technologies' most recent quarterly results. By next year, the integration of Wegener will be complete and the Company could see significant revenue and profit growth which could have positive impact on the stock price in the coming year.

Last blog post:
Novra Technologies is a strong buy given its recent financial results and outlook

3. Our Top Ideas stock which made R&D investments to upgrade its technology, thus leading to expanding sales and more profitability.

Prediction is:
Destiny Media Technologies Inc. (TSXV: DSY- C$0.33)

Destiny Media Technologies is the provider of Play MPE, a cloud-based enterprise Software-as-a-Service (SaaS) used by the recording industry for promoting and distributing broadcast-quality audio, video, images, promotional information and other digital content securely through the internet.

Last year, the Company has decided to reinvest in its Play MPE technology. It began with the re-engineering to a cloud-based architecture, which laid the groundwork to improve the software’s reliability and performance. This allowed for the rollout of a major upgrade: the release of Play MPE Version in middle of 2018. The new version of the technology has already been embraced by the Company’s largest customer, Universal Music, which renewed its Online Content Distribution Services Agreement with Destiny Media Technologies Inc., including a 14% increase in monthly fees to accommodate its expanded use of the Play MPE(R) system. The Universal agreement and other companies expected to be sign should have a meaningful impact on revenues and profits next year, as well as a potential positive impact on the Company’s stock price moving forward.

Last blog post:
Destiny Media Technologies is a value buy that is growing and already profitable

A recap of Investofile’s predictions for 2018:

1. Our Top Ideas stock that should get discovered by institutional investors in 2018.

Prediction was: Sangoma Technologies Inc. (TSXV: STC)
Then: C$0.75 Now: C$1.23 Current return: +64%

In 2018, Sangoma Technologies was discovered by institutional investors and research analysts and, subsequently, the stock's trading volumes and price have risen sharply. The Company also closed a C$13 million equity financing during the year, which was heavily subscribed to by institutional investors.

2. Our Top Ideas stock which could see a significant turnaround in revenues and profits.

Prediction was: Posera Ltd. (TSX: PAY)
Then: C$0.195 Now: C$0.10 Current return: -49%

Posera’s products and services facilitate all aspects of the payment transaction between the merchant and the consumer in the hospitality industry.The Company’s Point-of-Sale (POS) Systems software solutions, associated enterprise management tools and debit/credit payment terminals have been deployed in 25 countries in over 30,000 merchant locations worldwide.

To date in 2018 revenue growth is flat and profits have not yet emerged. Our predication of revenue and profit growth was based a widespread deployment of the Company’s SecureTablePay payment solution in the US market in 2018. The deployment of SecureTablePay in the USA is now just beginning and should gain traction in 2019.

3. Our Top Ideas stock which could see revenue growth from bigger contracts in 2018.

Prediction was: Intrinsyc Technologies (TSX: ITC)
Then: C$1.27 Now: C$1.39 Current return: +9.5%

Intrinsyc Technologies derives sales from proprietary computer modules and development kits, as well as high-margin engineering services related to those modules and kits for an OEM product development program.

We predicted for 2018 that the Company’s revenue growth would benefit from large contract wins. It did, and revenues have jumped 34% in the first nine months of 2018 to US$18.6 million. While the stock is up somewhat in price from a year ago, the current value still does not reflect the business success Intrinsyc has generated this year.

Author’s ownership disclosure: Yes - ITC, STC, PAY, DSY, NVI


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.com is not engaged in an investor relations agreement with Intrinsyc Technologies Corp. Sangoma Technologies Corp., Posera Ltd., Novra Technologies Inc. and Destiny Media Technologies Inc. nor has it received any compensation from Intrinsyc Technologies Corp. Sangoma Technologies Corp., Posera Ltd., Novra Technologies Inc. and Destiny Media Technologies Inc. for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Intrinsyc Technologies Corp., Sangoma Technologies Corp., Posera Ltd., Novra Technologies Inc. and Destiny Media 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.