DGIPF.. $$0.435.. Up over 10% since the first and I just got tired chasing it.. Looks like a nice position trading stock.. It's real thin and has precived value by most.. Time will tell but below is the post that got my attention .. I will have to say their web site doesn't give much in the way of information so I'm relieying on others on this one.. hank
Nice Company ,, worth the time to DD.. hank
From another posters view..
SSKILLZ1 Member Level Sunday, 01/04/15 12:41:01 PM
Re: None
Post # of 7019
DGI.TO (DGPIF)
I've been buying DGI.TO (sub .40 USD) over the last month for me this is a Table Pounder, and my best idea for 2015. We will see how it does. My DD is below.
Business Services
This is the stock I have been buying the whole month of December, and even brought a little on Friday. It is 6% of my personal portfolio which for me is a huge position as this is my top pick of 2015. Here is what I like.
Turnaround Play- DGI.TO is a turnaround play that is based on threefold approach, revenue stabilization and then growth, cutting costs and making themselves far more efficient and profitable, and reducing debt. The Next question is how are they doing?
Revenues: have stabilized in fact last quarter was the first quarter where they showed revenue growth in a while, I expect the stabilization/Growth to continue in my opinion. They have won a lot of new business to increase revs which is very positive in my opinion.
Cutting Costs: They have taken a ton of overhead out of the business. In fact they are consolidating 4 facilities, to 1 state of the art facility in q1 of 2015, that is expect to save 2.5-3 Million annually, we are talking about adding about .08 -.10 after tax eps to the bottom line next year on this alone.
Reducing Debt: Since 2013 they have reduced long-term debt by approximately 10 Million and Paid down the bank loan by 2 million just this quarter alone. I expect debt to continue to be reduced and handled by the enormous bottom line profits we are seeing.
Q3 and 9 Months Ended
The company reported 5.4% y/y revenue growth, and .08 eps. And for Nine Months ended we have seen .12 EPS. If we ex out restructuring costs (which I believe we should) we are looking at .09 and .19 for 3 and 9 months respectively.
Q4 and the Look Ahead
In the q3 CC, when asked about q4. They said they were optimistic it would be the best quarter of the year. I expect .10-.15 in q4 (Ignoring restructuring expenses).
As for next year I expect revs to be in line to slightly up next year, so I expect .40-.50 (Ignoring restructuring expenses)
Valuation
If my 2015 estimates are correct the stock will be trading at a PE of roughly 1. Now I realize there are concerns and I will address them in a bit But I don’t see why this stock can’t get a 3-5 PE rather easily, will increase the current share price by 200-400% if my numbers are proven to be correct, in my opinion there is no stock with higher upside potential then DGI.TO at this point in the market right now.
The Concerns
Balance sheet is admittingly weak, but there earnings should be easily enough to support and continue to reduce their debt levels in my opinion.
The second concern is should we ex out the never ending restructuring expenses. I believe we should, and I believe these restructuring expenses should be exed out because they are actually showing that there is a result, these expense have clearly led to reducing unnecessary overhead on both the square footage and personal side reflected into lower operating expenses. Also it is important to note restructuring expenses have been dropping y/y, I expect that to continue as more of the cost savings plan is realized and is behind them. q1 will should see a rise because a specific event that is gonna be long term helpful on both the cost side, and the efficiency side of the business.
Why the stock price is at lower levels? Well I believe Tax loss selling was a huge reason, as I said many times when a company is at its lows at and has a good November quarter it has 0 Value to the stock price during that year. Having said that it is now 2015, that is behind us now and as this exciting turnaround/absurdly cheap Valuation story comes to light I expect people will get excited, because there is a lot to get excited about here, as it might be the cheapest stock I have ever seen.
Why am I Table Pounding on DGI.TO (DGPIF)? I think DGI.TO is one of the cheapest stocks I have ever seen, I admit there are some warts, but the stock is priced for unmitigated disaster anything better should cause the stock to double, triple or even more in 2015.
Conclusion: I think DGI.TO (DGPIF) is absurdly undervalued, and now that we are finally starting to see some revenue growth, along with additional cost saving that will be very helpful to increasing the bottom line in 2015. All is just my opinion, and I could always be wrong though.
