DDDC may be true
But strictly based on the numbers there is cheaper stuff out there. You asked the question I just answered.
That said not knowing the details this is what my concern would be just based on financials. If you disagree please share. Thats the point of this board.
VOIP is a commodity industry and DDDC is showing the margin compression I would expect in a commodity industry with margins dropping about 500 basis points over the last few quarters.
In addition they are only increasing operating income by about 5% of their sales increases.
With 30 million shares outstanding that implies it would take an extra 6 million of sales for them to earn an extra penny.
Since I personally like stocks trading at low multiples in this case lets say 20 is a low multiple due to their growth they would need to earn .03 a quarter for it to be attractive to me.
That means they need to have operating earnings of 900k which I believe would require an extra 18 million a quarter in sales.
I believe that would have to be at least 2 years away and in two years the industry could change dramatically, margins could deteriorate etc.
I have no idea how the market will treat the company or if the stock price will increase, but VOIP is alot like internet dial up service was at one point. It was a huge growth commodity business that became very tough for many of the players.
Hope it works out well for you
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