Gain Clients Inc (GCLT)

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Goldman Small Cap Research Report http://www.goldmanresearch.com

Tuesday June 23, 2015 04:27

Summer Business Could Sizzle For This Real Estate Stock

Summertime usually is the most important period for the real estate industry and this year should be no different. Finding the right stock in the space is no easy task but for those investors that don’t mind a bit of risk or speculation, a savvy approach is to invest in companies that provide technology to the real estate industry in general. We liken this strategy to one of our best picks of the past few years, and a 48% gainer year-to-date, Autobytel (NASDAQ – ABTL - $16.10), which operates as a marketing services (primarily technology) to the automotive industry.

If management executes its strategy, GainClients, Inc. (OTC – GCLT - $0.07 - NR) could be the real estate version of Autobytel. According to its website, GainClients is a technology provider to the real estate agents/brokerages, loan officers/mortgage brokerages and title and escrow officers/companies, insurance agents/companies and consumers. The Company provides lead generation and marketing services through its recently released next generation SikkU (“Seek-u”) software service, the GCard. The GCard is a multi-platform (web, text, mobile web and iPhone/Android App) that builds and promotes relationships among real estate professionals and their clients.

When participating professionals share their clients with each other, relationships become fluid, are virally grown and developed within each team’s network. Similar to other popular online networks, professional users can invite clients and their industry partners to join their GCard network and be featured as a trusted team member. As a result, the SikkU GCard creates and builds relationships between real estate professionals and their clients in a preferred environment with accurate real estate data that is accessible via smart phones and the web.

GainClients generates revenue through monthly subscriptions from organizational, enterprise accounts, individual real estate, mortgage, and title and escrow professionals, along with real estate related organizations such as banks, credit unions, real estate and lender brokerages, and title/escrow and insurance companies. The spring launch appears to be favorable, with the addition of 175 new clients and 3000 page views in the first week of June alone which gives GCLT roughly 1400 total clients.

In our view, the Company’s progress should be measured by client growth and engagement during this early stage period rather than top-line or operating financials. The stock trades at the upper end of its 52-week range, but still more than 30% below its year high and if client sign-up growth continues at its current clip, this figure could be exceeded by year-end.

Written by Goldman Small Cap Research Staff