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janey,
I think we will see a substantial increase when we least expect it.
There may be an institution that shows up buying, an article written or any other big event that could simply cause a flood in volume rocketing it higher (as happened last time).
Patience will be rewarded....
E.
The OTC L2 only truly updates after 9:30 (when the market opens- so I would not take anything prior to that with much validity)
That being said, now looking likt we took out most of that large block on the ask:
MPID
Ask Price
Size
Date/Time
CDEL 0.46 10,091 09:45
NITE 0.48 5,000 09:41
CFGN 0.48 2,500 02/03
CANT 0.49 5,000 09:30
CSTI 0.51 1,000 09:25
ETRF 0.79 5,000 09:41
ARXS 1.87 100 02/21
LAFC 1.87 100 02/27
MAXM 200.00 1 07:36
BGCE U 0 05/01
Q1-2017 Updated - Valuation over the next Fiscal Year under different methods:
- Overall a very good quarter, especially with Q1 which is seasonally weaker. It is great to see this strong growth in revenue/card holders and best of all no more debt or legal payments!
I've updated my assumptions based on this quarter. I've kept GM% at 45% given Q1 is seasonally lower and I believe it will likely normalize. I think we will continue to see great growth from the company going forward. It is especially interesting that they note SG&A as being "high"- I actually did not see it as that high (but used the Q1 ratio of SG&A% of revenue as a proxy - if it goes lower all the better). Trading multiples, for the most part, have climbed in the sector (as seen below). I honestly would not be surprised to see this trade between 1.25 to 2$ over the next year. If this trend continues into 2018 we will definitely be in for a wild ride!
Current Fiscal Year growth in revenue: 45% ~15M in 2017
Gross margins: 45% ~6.8M
SG&A as a % of revenue 25% ~ 3.77M
D&A and other: 861k (current Q*4)
EBITDA:3.02M
NI:2.16M
F.d. share Count: 44.1M
Assumed cash balance in 12 months:~3M$ (1.6M currently plus a conservative additive cash flow of 1.4M given no debt and no legal pmts over next 3Q's)
Assumed LT debt:0$
**all multiples come from S&P capitalIQ from companies in a similar industry.
Method 1 - EV/Sales:
Mean EV/Sales Multiple:7.8x (or median of 5.2x)
15M*7.8=EV of 117.8M add back cash less debt=equity value of 120.8M/44M shares gives a share value of 2.74$/share (or 1.85$/share using the median)
Method 2 - EV/EBITDA:
Mean EV/EBITDA Multiple:17.6x
3M*17.6=EV of 53.1M add back cash less debt=56.2M/44M= 1.27$ per share
Method 3 - EV/Earnings (or P/E):
Believe it or not the average P/E in this sector has jumped to 45x! - I'll continue using 25x to be extra conservative
NI of 2.1M*x25=54M EV add cash = 57M/44M shares= 1.29$/share
*note this expects the next quarters to be stronger than Q1 - which is typically the trend. (however the multiple is already deeply discounted which makes the target price per share conservative)
Best of luck!
E.
somoney,
they had just surpassed 1M cardholders (per Q4 PR) so I would assume not too far off from that with some decent growth over the last Q bringing them to 1.15M.
It could be positive;
Sarna was a tiny little company that is not that known and only has one location.
Squar Milner is a top 70 accounting firm with over 300 employees and 6 different locations(located across the US and even the Cayman Islands).
I see it as an upgrade, could be that they want a more reputable firm that offers more complex tax planning and has a better reputation for an eventual uplist.
As it states in the 8k Sarna did not report anything wrong with 3Pea's statements and never had a bad opinion about the financial statement.
I personally think it's simply upgrading their auditors for the 2017FY (as these guys will now start by auditing Q1-2017).
E.
Janey, so am I (and all of us likely feel the same). That being said the issue is likely twofolds;
1- Lack of investor awareness
2- The Company is currently in a "show me" phase for many investors on the sidelines. This is due to an expectation that many investors have had that Q4 is seasonally strong and that one good Q4 cannot necessarily be believed to be a trend. Also, the Company has gone through a rough patch last year with slightly lower earnings than the prior year (due to revenue recognition of many projects in the prior year's Q4 - which skewed earnings and obviously the unfortunate lawsuit). Although things things are now behind us, its only the beginning of the turn around and stable core business growth. I tend to believe that the Company is over the "lumpy" revenue and will be delivering overall strong growth year over year. Now with the lawsuit paid off and the note payable we can finally start generating strong cash flow in Q2 - 2017 (given this was all paid off in Q1-2017).
I believe that once the Company continues to show that Q1-Q2/2017 are also showing strong year over year growth we will start getting more traction from the investment community. Not to mention I think there will be more of a "story" to be told and we may start seeing better investor awareness and potentially articles getting written about us.
That's my two cents - I'm putting all my shares away for a very long time as I believe in 3 years this may be a multi-bagger for all of us.
E.
Thanks for clarifying e-ore and reposting the truth after all of the non-sense being posted.
Welcome to the TPNL board -
E.
Hey Mountain dad,
thanks for the compliment. I am actually based out of Canada so most of my portfolio is in Canadian companies. (I've got it spread out across some small caps and a few more stable large caps - currently took positions in a few strong oil plays that were at a reasonable value.)
3Pea is my largest US small cap position, I've also got a bit in PTX as a turnaround/buyout story along with a few more stable/larger entities.
Hey Wow,
Its was just easier to take it as a % of rev for modeling purposes specially now that it has decreased to a more reasonable and assumed to be stable % of current revenue base.
Ideally if I were to do as proper model of 3Pea I would segment out each portion of the SG&A and apply different growth rates. But, for the most part it does have a certain correlation to revenue growth as we would assume that the "Selling" would go up as revenue increases due to increased incentive payouts to sales staff and that the general admin would likely not go up as much as revenue but would still increase slightly as you have more people serving/maintaining the growth in infrastructure and increased clients.
So in short I do not expect SG&A to grow as fast as revenue but it should still increase if they expect to aggressively ramp up.
As a Heads up - 3Pea was an Elite Sponsor of the International Plasma Protein Congress
pptaglobal.org/meetings-events/international-plasma-protein-congress
I plan to write one after Q1/Q2 - I want more of the story to unfold.
This is the problem with low liquidity stocks, but this is also a good thing as you can accumulate behind the scenes while no one knows about it and than out of the blue... it will just start rocketing when it starts getting noticed. My opinion for all is treat this as a gift/opportunity, i'm sure over the long run we will be very happy.
E.
Valuation over the next 12 months under different methods:
As usual, I will give my opinion on valuations. The following is with my own assumptions and includes only the information which we currently know (obviously the upside potential could be more assuming a substantial event occurs that would materially increase growth or vice versa)
I would share my spreadsheet but since its harder to do on this board here are the assumptions used:
Next 12-month growth in revenue: 35% ~14M in 2017
Gross margins: 50% ~ 7.03M
SG&A as a % of revenue 31.5% ~ 4.42M
D&A and other: 600k (close to the current year's amount)
EBITDA:2.601M
NI:2M
F.d. share Count: 43,867,228
Assumed cash balance in 12 months:~3M$ (1.6M currently plus a conservative additive cash flow of 1.4M)
Assumed LT debt:0$
**all multiples come from S&P capitalIQ from companies in a similar industry.
Method 1 - EV/Sales:
Mean EV/Sales Multiple:5.8x
14M*5.8=EV of 81.56M add back cash less debt=equity value of 84.5M/43.8M shares gives a share value of 1.93$/share
This is a typical metric for high growth tech companies and often used for takeover metrics.
Method 2 - EV/EBITDA:
Mean EV/EBITDA Multiple:17.6x
2.6M*17.6=EV of 45.787M add back cash less debt=48.8M/43.8M= 1.11$ per share
Typically a common method used to value companies with stable EBITDA margins and reliable earnings. Often a conservative way of valuing an entity.
Method 3 - EV/Earnings (or P/E):
Believe it or not the average P/E in this sector is around 35x - i'll use 25 x to be extra conservative (check out Visa, MC, GPN, VNTV to name a few)
NI of 2M*x25=50M EV add cash = 53M/43.8M shares= 1.21$/share
As you can see using the mean multiples of the sector, the expected growth, and assumed margins, the valuation ranges from 1.11$/share to 1.93$/share for the next 12 months.We can clearly see that if the company continues to execute like this over the next 3 years the effects would compound and you could easily find yourself with a stock between 3-5$/share. I will re-assess again after Q1 results are released. I am also holding on to all my shares - the story is only starting to unfold.
Best of luck!
E.
2016FY - Annual Report Highlights
Here is the summary - very strong results!
•Product & Services: As of December 31, 2016 the company had over one million cardholders participating in 120 card products an increase of 29 card products from December 31, 2015.
•Revenue increased by $2,309,131 over 2015 to $10,416,672 (28.5% increase)
•Gross profit increased by $1,131,275 over 2015 to $5,219,302 (27.7% increase) Gross margin remained at ~50%.
•SG&A expense decreased by $445,814 over 2015 to $3,288,373 (from 46% of revenue in 2015 to 31.5% of revenue this year - a very nice decrease in costs)
•Operating income of $1,358,609 in 2016FY in comparison to a net loss of -$8,872 in 2015FY. Net income was 1.4M this year vs. -2.41M last year due to the legal settlement cost in the prior year)
•EPS comes in at around 3.25 cents vs. -6 cents last year.
•Operating Cash flow 1.26M in 2016 vs. -719k in 2015
•As of March 2017: the company paid off the whole legal settlement amount remaining and paid off the note payable of 152k (essentially making the company debt free as at Q1 2017 – other than normal working capital payables)
Very nice trend - I expect more to come this year!
E.
I tend to agree with you mountaindad.
If they do take any write-downs it will be in this quarter to start fresh next year (and I imagine they will take a write down in regards to EU shut down but in the end this will save lots of SG&A expnse over the long term which will translate to higher earnings. As well, we can always "normalize" out any impairments/write downs as they will be one time costs and not reflective of the company's long term earnings profile.
I think next year's earnings will properly reflect the company's earning ability and will be a great year with - growth and increased cash flow (no more legal expense to pay either!)
As for long term uplist - the like exchange is the Nasdaq. I have included the link with the 4 ways a company can qualify. (p.6)
(smaller companies typical use standard 1: Earnings qualification.
- >Income from continuing operations must be: An aggregate in prior three fiscal years > $11 million
and Each of the prior three fiscal years > $0 and Each of the two
most recent fiscal years > $2.2 million
-->4$ price per share
-->$45M market value of shares and shareholders equity
https://listingcenter.nasdaq.com/assets/initialguide.pdf
All taken care of.
E
check out the post I pinned to the top for new shareholders/board members.
I included a range of different multiples and the valuations it currently gives. I'll do a more thorough analysis once Q4 numbers are out and even more when I see Q1 for the actual yoy growth.
I think there is strong potential for this to be over 1$ in the next 12 months.
Looking very Good on the Level 2:
Large bids at 0.36 and 0.39 with very little on the ask.
MPID
Bid Price
Size
Date/Time
NITE 0.39 10689 13:33
CSTI 0.36 12704 13:32
CDEL 0.36 7500 13:33
ARXS 0.255 2500 12/02
ARCA 0.1325 10000 08:00
CANT 0.11 5000 08:31
LAFC 0.01 10000 >year
CFGN 0.001 10000 01/23
MAXM 0.0001 10000 07:36
ETRF U 10:05
MPID
Ask Price
Size
Date/Time
NITE 0.40 3217 12:47
CSTI 0.40 2500 13:32
ARXS 0.4188 2500 01/05
CDEL 0.4335 2500 13:33
CFGN 0.48 2500 11:36
ETRF 0.50 11000 13:33
CANT 1.00 100 08:31
LAFC 10.00 100 >year
MAXM 200.00 1 07:36
ARCA U 08:00
Hey hweb2,
you are right for certain public companies (especially the larger ones listed on major exchanges) - I've double checked some of them and this did apply.
I'm sure he's within 3Pea's insider trading policy as I don't think he would be doing it if it wasn't the case. The policies for many smaller OTC listed entities tend to be a lot looser than the NYSE/Nasdaq standards.
All things aside, I view it as a good sign and I am glad he is continuing to buy...
Lets hope this is a signal for good YE results.
blackout only applies for a certain period before the expected release date (sometimes 10 days before release - given they could take advantage of a buy and an expected upswing immediately after... or also applies right before the release of a "substantial event".
Because otherwise the insiders would never be able to buy because they always "technically know" how the Company is performing in a given quarter.
About 75.24% of float held by insiders/insider holding companies/Relevant insider parties (or prior directors) - see below full breakdown (Pan Dern Family is the CEO's holding co.)
Holder Common Stock Equivalent Held % Of CSO
Newcomer, Mark R. (Co-Founder, Chairman, Chief Executive Officer, President and Treasurer) 8,010,000--> 18.65 %
Spence, Daniel H. (Co-Founder, Chief Technology Officer, Chief Information Officer and Director) 7,510,000 --> 17.486%
Pam Dern Family Limited Partnership 5,760,000 --> 13.411%
Weiler, David R. (Former Director) 4,189,950 --> 9.756%
DePrima J.D., Esq., Anthony E. (Secretary and Director) 2,745,163 --> 6.392%
De Joya CPA, Arthur (Former Chief Financial Officer) 2,050,000 --> 4.773%
Newcomer, Christopher E. (Former Chief Technology Officer) 2,000,000--> 4.657%
Polan, Brian (Chief Financial Officer) 52,000 --> 0.121%
Total: 32,317,113 --> 75.246%
Full Steam ahead...
Not much offered in the 0.40's and still a bunch on the bid.
...Ask Price.. Size... Date/Time
NITE 0.40 3717 09:31
CSTI 0.40 2500 09:55
ARXS 0.4188 2500 01/05
CDEL 0.54 3000 09:58
CFGN 0.55 1000 01/23
ETRF 0.77 3000 09:30
CANT 1.00 100 08:31
LAFC 10.00 100 >year
MAXM 200.00 1 07:35
Another 20k on the bid on top of that 30k and very little being offered...
Real-Time Level 2 Quote Montage
Bid Price
Size
Date/Time
CANT 0.33 15000 14:29
CDEL 0.33 5000 14:33
NITE 0.326 30000 14:28
CSTI 0.325 2500 14:28
ARXS 0.255 2500 12/02
ETRF 0.21 5000 14:29
ARCA 0.1325 10000 08:00
LAFC 0.01 10000 >year
CFGN 0.001 10000 01/23
MAXM 0.0001 10000 07:35
MPID
Ask Price
Size
Date/Time
CDEL 0.35 4000 14:33
NITE 0.40 3717 09:30
CSTI 0.40 2500 14:28
ARXS 0.4188 2500 01/05
ETRF 0.50 11000 09:30
CFGN 0.55 1000 01/23
CANT 1.00 100 08:31
LAFC 10.00 100 >year
MAXM 200.00 1 07:35
ARCA U 08:00
Another 12,000 shares purchased by the CFO (Brian Polan) today.
Bumping post as Info for any new holders:
3Pea History and Why Invest now?
Andy, thanks for your interest in the stock.
I'm not going to knock you down for wanting a rational reason to invest in the stock (I am actually a financial analyst so I don't think it's irrational to want to have concrete information before investing in a company).
That being said, I have been a long-term holder in TPNL and have seen the up's and downs.
Firstly, to answer your question about that jump quite awhile back to 1$. Although I was happy about it, I personally don't think the jump was that justified. It was principally driven by a Q4 that had extremely high earnings (compare to the usual quarters). People and especially a few people that had written articles on Seeking Alpha about it drove the stock upwards with optimism that this was going to happen every quarter. The low float makes this easy to move with a few willing buyers. Long story short that Q4 years back was not reflective of a normal quarter and it was simply due to the way that revenues were recognized that it was skewed upwards. (we saw after that the stock drastically corrected when they saw that the next quarters were not like that blow out one!)
Now you might ask about why revenue was recognized this way...
Well, 3Pea operates in many sectors of the prepaid card market. Its main bread and butter is the plasma donation centers but back then they had many "one off" Pharmaceutical or incentive programs running. According to standard accounting practices, revenue is recognized at the end of the programs (which can last many months to potentially years) it just turned out that many of them ended in that Q4 thus having extremely large one-time revenue being recognized.
To cut to the chase about why I believe 3Pea is a good investment at these prices:
- The company has re-focused its business model to focus on its plasma donation centers offering (this is a consistent and reliable stream of income with strong growth - just look up plasma centers growth in the US ~ 15% per year). I like companies that focus on being experts on one main sector, this way they set themselves up as leaders in the space and growth will follow. Furthermore, no more highly skewed quarters from random one-off programs, making earnings much more consistent.
- The other reason the company's stock fell in the past was due to a frivolous legal suit. It was settled, and the CFO at that time was fired. (I trust the current team - the problem was solved yet the company took a large financial hit. The cash flow will dramatically increase ~300k+ per quarter starting in the first half of 2017 as the legal payments will cease by the end of Q1 2017. (Larger cash flow=better enterprise value for the company)
- Growth is starting to pick up on both top and bottom line per the recent quarters (per latest Q:revenue up 38% yoy, substantial decrease in SG&A, and net margins of 17.1%). They are consistently adding centers and adding new clients.
- Over 70% of shares are owned by Management (and ex-management: the CEO's brother, former CTO still owns 2M shares) and recently we saw the first ever "open market stock purchases" by management in the companies entire history. The management team is highly motivated to increase the long-term value of the company and the buying simply makes me more bullish. Also, to answer your question about PR's (which trust me, I've asked multiple times to management). They believe in focusing on managing the business and that over the long term value will be recognized. They are also waiting until their story develops itself a bit more and that cash flow starts flowing after finishing up the last of the legal settlement payments. (I personally see it as a reasonable way to not just throw cash at fancy PR's and promotions)
Lastly, based on industry metrics the company is undervalued (i'll paste my last valuation post under here for you to see)
______________________________________________
Here are the latest multiples for similar industry players (from S&P CIQ)
Mean Comp. Multiples:
TEV/Revenues (LTM):6.3x
TEV/EBITDA (LTM): 28.2x
TEV/EBIT (LTM): 23.1x
P/E: 32x
TEV/Forward Revenue (NTM): 5.82x
Obviously these multiples should be discounted to take into account the higher risk, smaller size and lower liquidity of TPNL (since the Comp list does include a long list with some of the bigger guys in the payment processing space a few of the comps included are: AMEX, VISA, MC, GPN, PLPM, CCN, VPY, WEX, CASS, etc...)
I remember doing some research on this space last year and most takeovers were occurring at 5-10x multiples on revenue. I personally prefer EBITDA multiples as a good proxy for valuing companies.
If we use the approximate EBITDA this Q of ~650k annualized*4=2.6M
Than Apply 15x multiple to be conservative (15*2.6M)=39M/43M shares= 0.91 cents or if you wanted to bump it up to 20 times (still well below most comps) it would give us (15*2.6M=52M/43M shares= $1.21 per share.
Otherwise, using a revenue multiple of 4 times to be conservative using 2.86M*4=11.25M *4x=45M/43M shares would give us $ 1.05 per share. (which is quite reasonable given most takeovers have been recorded at 5-10x revenue.
Finally using a P/E ratio, The company can realistically hit 0.05 eps/yr if not more if we see good growth (Q4 is typically strong).
Applying a 15x multiple (about a 50% discount to current mean multiples) would place the stock at 0.75$/ share. I think a 15x P/E is quite realistic given the multiples that are currently in the card payment processing space.
Its always good to use multiple valuation methods but as you can see, using conservative/reasonable metrics it would not be out of the realm of possibilities to see this stock trade over 50 cents or even towards 1$. Obviously these valuations include only the current company data if the Company lands any bigger contracts or expands in any material way the upside could change drastically.
I am holding long and strong well into 2017 to see how this materializes itself.
Hope this helps - E.
3Pea History and Why Invest now?
Andy, thanks for your interest in the stock.
I'm not going to knock you down for wanting a rational reason to invest in the stock (I am actually a financial analyst so I don't think it's irrational to want to have concrete information before investing in a company).
That being said, I have been a long-term holder in TPNL and have seen the up's and downs.
Firstly, to answer your question about that jump quite awhile back to 1$. Although I was happy about it, I personally don't think the jump was that justified. It was principally driven by a Q4 that had extremely high earnings (compare to the usual quarters). People and especially a few people that had written articles on Seeking Alpha about it drove the stock upwards with optimism that this was going to happen every quarter. The low float makes this easy to move with a few willing buyers. Long story short that Q4 years back was not reflective of a normal quarter and it was simply due to the way that revenues were recognized that it was skewed upwards. (we saw after that the stock drastically corrected when they saw that the next quarters were not like that blow out one!)
Now you might ask about why revenue was recognized this way...
Well, 3Pea operates in many sectors of the prepaid card market. Its main bread and butter is the plasma donation centers but back then they had many "one off" Pharmaceutical or incentive programs running. According to standard accounting practices, revenue is recognized at the end of the programs (which can last many months to potentially years) it just turned out that many of them ended in that Q4 thus having extremely large one-time revenue being recognized.
To cut to the chase about why I believe 3Pea is a good investment at these prices:
- The company has re-focused its business model to focus on its plasma donation centers offering (this is a consistent and reliable stream of income with strong growth - just look up plasma centers growth in the US ~ 15% per year). I like companies that focus on being experts on one main sector, this way they set themselves up as leaders in the space and growth will follow. Furthermore, no more highly skewed quarters from random one-off programs, making earnings much more consistent.
- The other reason the company's stock fell in the past was due to a frivolous legal suit. It was settled, and the CFO at that time was fired. (I trust the current team - the problem was solved yet the company took a large financial hit. The cash flow will dramatically increase ~300k+ per quarter starting in the first half of 2017 as the legal payments will cease by the end of Q1 2017. (Larger cash flow=better enterprise value for the company)
- Growth is starting to pick up on both top and bottom line per the recent quarters (per latest Q:revenue up 38% yoy, substantial decrease in SG&A, and net margins of 17.1%). They are consistently adding centers and adding new clients.
- Over 70% of shares are owned by Management (and ex-management: the CEO's brother, former CTO still owns 2M shares) and recently we saw the first ever "open market stock purchases" by management in the companies entire history. The management team is highly motivated to increase the long-term value of the company and the buying simply makes me more bullish. Also, to answer your question about PR's (which trust me, I've asked multiple times to management). They believe in focusing on managing the business and that over the long term value will be recognized. They are also waiting until their story develops itself a bit more and that cash flow starts flowing after finishing up the last of the legal settlement payments. (I personally see it as a reasonable way to not just throw cash at fancy PR's and promotions)
Lastly, based on industry metrics the company is undervalued (i'll paste my last valuation post under here for you to see)
______________________________________________
Here are the latest multiples for similar industry players (from S&P CIQ)
Mean Comp. Multiples:
TEV/Revenues (LTM):6.3x
TEV/EBITDA (LTM): 28.2x
TEV/EBIT (LTM): 23.1x
P/E: 32x
TEV/Forward Revenue (NTM): 5.82x
Obviously these multiples should be discounted to take into account the higher risk, smaller size and lower liquidity of TPNL (since the Comp list does include a long list with some of the bigger guys in the payment processing space a few of the comps included are: AMEX, VISA, MC, GPN, PLPM, CCN, VPY, WEX, CASS, etc...)
I remember doing some research on this space last year and most takeovers were occurring at 5-10x multiples on revenue. I personally prefer EBITDA multiples as a good proxy for valuing companies.
If we use the approximate EBITDA this Q of ~650k annualized*4=2.6M
Than Apply 15x multiple to be conservative (15*2.6M)=39M/43M shares= 0.91 cents or if you wanted to bump it up to 20 times (still well below most comps) it would give us (15*2.6M=52M/43M shares= $1.21 per share.
Otherwise, using a revenue multiple of 4 times to be conservative using 2.86M*4=11.25M *4x=45M/43M shares would give us $ 1.05 per share. (which is quite reasonable given most takeovers have been recorded at 5-10x revenue.
Finally using a P/E ratio, The company can realistically hit 0.05 eps/yr if not more if we see good growth (Q4 is typically strong).
Applying a 15x multiple (about a 50% discount to current mean multiples) would place the stock at 0.75$/ share. I think a 15x P/E is quite realistic given the multiples that are currently in the card payment processing space.
Its always good to use multiple valuation methods but as you can see, using conservative/reasonable metrics it would not be out of the realm of possibilities to see this stock trade over 50 cents or even towards 1$. Obviously these valuations include only the current company data if the Company lands any bigger contracts or expands in any material way the upside could change drastically.
I am holding long and strong well into 2017 to see how this materializes itself.
Hope this helps - E.
New Filling is Up with CFO buying a bit more:
http://ih.advfn.com/p.php?pid=nmona&article=73033644
Not sure... but massive amounts of buyers stepping in (check out the huge amount of shares on the BID.. nearly 70k shares from 0.30 onwards):
MPID
Bid Price
Size
Date/Time
CDEL 0.3101 3650 13:54
CANT 0.31 30000 11:55
CSTI 0.30 20000 12:07
NITE 0.30 13000 13:25
ETRF 0.30 5000 11:55
ARCA 0.1325 10000 11:13
LAFC 0.01 10000 12/08
MAXM 0.0001 10000 07:35
ARXS U 09/19
MPID
Ask Price
Size
Date/Time
CANT 0.34 2500 11:13
ETRF 0.37 15000 11:55
NITE 0.37 2500 13:25
CSTI 0.37 2500 13:28
CDEL 1.00 13375 13:54
LAFC 10.00 100 12/08
MAXM 200.00 1 07:35
ARXS U 09/19
ARCA U 11:13
More insider buying:
http://ih.advfn.com/p.php?pid=nmona&article=72977361
I looked it up and don't see any open market acquisitions over the past 5 years only thing ever done was through stock grants. Non stock grants/open market transactions are very positive!
Management Buying in Open Market:
CFO has been trying to buy shares in open market and has been accumulating, very good sign:
http://ih.advfn.com/p.php?pid=nmona&article=72954621
Wow.. guess they decided to start PR's after all...
I'm glad to see them starting to do this highlighting a strong quarter!
No to mention all the executives getting stock grants motivating them to get this thing move higher...
E.
http://finance.yahoo.com/news/3pea-reports-third-quarter-2016-140600806.html
Q3 2016 Highlights:
Third quarter 2016 revenue increased 38% to $2.81 million compared to $2.03 million in the same year ago quarter. Revenue for the nine months ended September 30, 2016 increased 24% to $7.36 million from $5.94 million for the same period last year.
Gross profit for the three months ended September 30, 2016 increased to $1.42 million compared to $1.10 million in the same year ago quarter. Gross profit for the nine months ended September 30, 2016 increased to $3.68 million from $2.98 million for the same period last year.
Net income for the three months ended September 30, 2016 was $480,429, or $.01 per share, compared to a net loss of $(2,612,296) or $(0.06) per share in the same year ago quarter. Net income for the nine months ended September 30, 2016 was $898,048 or $0.02 per share compared to a net loss of $(2,612,296) or $(0.06) per share in the same period last year.
3PEA expects current revenue and profitability trends to continue.
Bid:
NITE 0.23 34300 09:32
CSTI 0.225 2500 09:30
CANT 0.14 5000 08:31
ARCA 0.1325 10000 08:00
LAFC 0.01 10000 12/08
MAXM 0.0001 10000 07:35
Ask:
NITE 0.25 2500 12:14
CSTI 0.27 6000 09:30
ETRF 0.41 12400 09:30
CANT 0.50 2500 08:31
ARCA 0.99 10000 08:00
LAFC 10.00 100 12/08
Link to L2:http://www.otcmarkets.com/stock/TPNL/quote
hweb2,
From what I know management wanted to focus resources on growing the business and believed money was best spent there. Also, the Company was undergoing a little turnaround after settling a suit and wants to have a good story to tell with a record of proven growth before starting to boost its public image through PR's. I believe management will start again with PR's over the next year, after all they own ~70% of the company and would obviously want to see an appreciation in their share of the business in the long run. In the interim, I see this as a great time to accumulate shares in a small little gem which many people don't know about.
Best of luck,
E.
Big Bidder just stepped in at 0.225 for 70k. very thin on the ask - lots of strong hands that know its worth much more...
Bid:
CSTI 0.225 70000 15:07
NITE 0.205 10000 09:34
CDEL 0.1904 14100 09:47
CANT 0.14 5000 09:34
ARCA 0.1325 10000 08:00
LAFC 0.01 10000 12/08
MAXM 0.0001 10000 07:35
Ask:
NITE 0.25 9000 09:31
CSTI 0.27 6000 15:07
CDEL 0.38 5000 09:47
ETRF 0.41 12400 11:33
CANT 0.50 2500 09:34
ARCA 0.99 10000 08:00
LAFC 10.00 100 12/08
MAXM 200.00 1 07:35
Here are the latest multiples for similar industry players (from S&P CIQ)
Mean Comp. Multiples:
TEV/Revenues (LTM):6.3x
TEV/EBITDA (LTM): 28.2x
TEV/EBIT (LTM): 23.1x
P/E: 32x
TEV/Forward Revenue (NTM): 5.82x
Obviously these multiples should be discounted to take into account the higher risk, smaller size and lower liquidity of TPNL (since the Comp list does include a long list with some of the bigger guys in the payment processing space a few of the comps included are: AMEX, VISA, MC, GPN, PLPM, CCN, VPY, WEX, CASS, etc...)
I remember doing some research on this space last year and most takeovers were occurring at 5-10x multiples on revenue. I personally prefer EBITDA multiples as a good proxy for valuing companies.
If we use the approximate EBITDA this Q of ~650k annualized*4=2.6M
Than Apply 15x multiple to be conservative (15*2.6M)=39M/43M shares= 0.91 cents or if you wanted to bump it up to 20 times (still well below most comps) it would give us (15*2.6M=52M/43M shares= $1.21 per share.
Otherwise, using a revenue multiple of 4 times to be conservative using 2.86M*4=11.25M *4x=45M/43M shares would give us $ 1.05 per share. (which is quite reasonable given most takeovers have been recorded at 5-10x revenue.
Finally using a P/E ratio, The company can realistically hit 0.05 eps/yr if not more if we see good growth (Q4 is typically strong).
Applying a 15x multiple (about a 50% discount to current mean multiples) would place the stock at 0.75$/ share. I think a 15x P/E is quite realistic given the multiples that are currently in the card payment processing space.
Its always good to use multiple valuation methods but as you can see, using conservative/reasonable metrics it would not be out of the realm of possibilities to see this stock trade over 50 cents or even towards 1$. Obviously these valuations include only the current company data if the Company lands any bigger contracts or expands in any material way the upside could change drastically.
I am holding long and strong well into 2017 to see how this materializes itself.
Hope this helps - E.
Great Results!
Definitively a good little turn around story going on here.
I am especially happy that the revenue growth is mainly due to plasma center growth and that the Company has maintained its focus on its primary revenue segment. The revenue will continue to trend higher with stable growth in plasma centers and increased transactions. (yoy growth of 38.3% on the top line)
Secondly, I am glad to see a substantial decrease in SG&A. I always felt the SG&A was a bit high and have much more confidence in the company's abilities given the more reasonable level of operating expenses with the company turning a nice profit (about a 17.1% net margin).
On a final note, as of the end of September there was only 500k left to pay on the legal settlement. This should be finished being paid by early 2017 which will add around 250k per quarter in cash flow. I can definitely see 2017 shaping up to be a great year for 3Pea.
I will get the current comp multiples and post shortly.
E
Some big bids coming in with the Ask thinning. This could really run if we get good news...
Bid
NITE 0.185 24300 12:25
CDEL 0.167 15000 09:30
CSTI 0.167 5000 12:46
CANT 0.14 5000 08:31
ARCA 0.1325 10000 08:00
Ask
CSTI 0.22 5500 12:46
CANT 0.225 2500 08:31
NITE 0.25 9000 09:31
CDEL 0.41 12475 09:30
ETRF 0.801 25000 12:46
LAFC 10.00 100 12/08
Even better now on the Ask:
CSTI 0.19 5000 08:30
CANT 0.225 2500 08:31
NITE 0.25 9000 09:31
CDEL 0.38 5000 09:30
ETRF 0.801 25000 09:30
LAFC 10.00 100 12/08
Only 21.5k shares before 0.801, people are holding on tight to these shares. It could really fly on a decent earnings report (expected Friday or Monday)
Was just about to post the L2 quotes, starting to see a bit more buyers come in.
Real-Time Level 2 Quote Montage
MPID
Bid Price
Size
Date/Time
NITE/ 0.20/ 30000
CDEL/ 0.168/ 10000
CSTI/ 0.15/ 14000
CANT/ 0.14/ 5000
ARCA/ 0.135/ 10000
CFGN/ 0.12/ 5000
LAFC/ 0.01/ 10000
MAXM/ 0.0001/ 10000
Ask Price
Size
Date/Time
NITE/ 0.21/ 5000
CSTI/ 0.21/ 2500
CDEL/ 0.22/ 15000
CANT/ 0.225/ 2500
ETRF/ 0.25/ 3000
CFGN/ 0.40/ 2500
LAFC/ 10.00/ 100
MAXM/ 200.00/ 1
Here are the comps as per Capital IQ, mean TEV to sales is 6x which would place the company at a value of 52.8M with ttm revenue of 8.8M which is 1.22$/share given 42.9M share count.
Company Name....................TEV/Total Revenues LTM........TEV/EBITDA LTM
MoneyOnMobile, Inc. (OTCPK:CLPI) 8.2x ... NM
Versapay Corporation (TSXV:VPY) 5.3x ... NM
Planet Payment, Inc. (NasdaqCM:PLPM) 3.5x ... 26.0x
Cass Information Systems(NasdaqGS:CASS) 3.0x ... 10.1x
WEX Inc. (NYSE:WEX) 5.9x ... 18.6x
Vantiv, Inc. (NYSE:VNTV) 3.4x ... 14.8x
Visa Inc. (NYSE:V) 14.2x ... 20.8x
CardConnect Corp. (NasdaqCM:CCN) 0.6x ... 13.4x
FleetCor Technologies, Inc. (NYSE:FLT) 10.2x ... 21.9x
Global Payments Inc. (NYSE:GPN) 5.4x ... 23.6x
3Pea International, Inc (OTCBB:TPNL) 0.6x 7.1x
TEV/Total Revenues LTM.....TEV/EBITDA LTM
High....14.2x.................26.0x
Low.....0.6x..................10.1x
Mean....6.0x..................18.6x
Median..5.3x..................19.7x