Monday, November 06, 2017 10:56:55 AM
QTRH.TO/QTRH old Wi-Lan - blowout Q Thursday
Bought some Quarterhill this morning which is the renamed WiLan - basically a patent licencer. This was a Canadian mid-cap darling a few years ago.
WiLan generates strong cash, but it is inconsistent, they had USD 150mm of cash on balance sheet this year and bought two other little Canadian based companies (Hamilton, Saskatoon) but with global footprints in the IIOT market. They had USD 44M in cash after these acquisitions at June 30 and and equal amount of working capital which is important for looking at EV. They are debt free.
QTRH is about to provide details of a blow-out quarter on thursday booking say USD 75mm in revenue and 50mm in EBITDA vs. a Market Cap of USD 230mm and EV of 185mm at the high end (they could have more cash and EV goes down).
High Q3 revenue will likely be reported as a one-time event from Wi-Lan. So you can't look at Q3 as sustainable.
http://www.quarterhill.com/news/press-release-details/2017/Quarterhill-Provides-Third-Quarter-Financial-Update/default.aspx
This is Benj Gallander, Canada's most successful value microcap investor with his President's Porfolio returning an unheard of and verified 20% over the last 20 years. Benj has been around the block and I listen to him more and more.
http://www.bnn.ca/market-call/benj-gallander-s-top-picks~1249910
If I was following QTRH back when the Q3 was pre-announced in early October (bottom of recent run below) it was a screaming buy. Starting out with a trade into thursday's announcement. QTRH has already broken above a downtrend line going back a couple years. We'll see what the details are on thursday.
Bought some Quarterhill this morning which is the renamed WiLan - basically a patent licencer. This was a Canadian mid-cap darling a few years ago.
WiLan generates strong cash, but it is inconsistent, they had USD 150mm of cash on balance sheet this year and bought two other little Canadian based companies (Hamilton, Saskatoon) but with global footprints in the IIOT market. They had USD 44M in cash after these acquisitions at June 30 and and equal amount of working capital which is important for looking at EV. They are debt free.
QTRH is about to provide details of a blow-out quarter on thursday booking say USD 75mm in revenue and 50mm in EBITDA vs. a Market Cap of USD 230mm and EV of 185mm at the high end (they could have more cash and EV goes down).
High Q3 revenue will likely be reported as a one-time event from Wi-Lan. So you can't look at Q3 as sustainable.
http://www.quarterhill.com/news/press-release-details/2017/Quarterhill-Provides-Third-Quarter-Financial-Update/default.aspx
This is Benj Gallander, Canada's most successful value microcap investor with his President's Porfolio returning an unheard of and verified 20% over the last 20 years. Benj has been around the block and I listen to him more and more.
http://www.bnn.ca/market-call/benj-gallander-s-top-picks~1249910
If I was following QTRH back when the Q3 was pre-announced in early October (bottom of recent run below) it was a screaming buy. Starting out with a trade into thursday's announcement. QTRH has already broken above a downtrend line going back a couple years. We'll see what the details are on thursday.
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