Morning Report: Year-end watch: CEO buys at Pivot Technology Solutions
December 20, 2017
Overview: Sentiment and Stocks
Today we continue with our theme of looking at stocks with positive INK Edge outlooks but which may be vulnerable to tax loss selling as we head to year end. Pivot Technology Solutions (PTG) provides IT solutions including hardware, maintenance, and support. Pivot is trading near its 200-day moving average and year-to-date the stock is up 29.2%. Nevertheless, the stock is more than 20% off its 52-week high of $2.94 set on July 27th which may make it a candidate for tax loss selling. Pivot currently has a Sunny overall INK Edge outlook ranking, however, in part due to strong insider commitment. President and CEO Kevin Shank has spent $18,726 picking up shares in the public market over the past 90 days. Moreover, Pivot has bought back $630,642 worth of shares over the same period, good for an estimated buyback yield of 2.87% over the trailing twelve months.
Pivot's recent financial results are mixed, but it is encouraging to see the CEO backing their outlook. Q3 revenue came in at US$389.1 million, up from US$365.5 million in Q3 2016. Management attributes revenue growth in part to the addition of TeraMach technologies on October 1, 2016. The company reported a net loss of US$813,000 (loss of US$0.02 per share), up from a loss of US$3.2 million (loss of US$0.08 per share) in the comparable period. Management notes that the addition of TeraMach added $1.9 million to selling, general, and administrative expenses which was more than offset by active cost management and increased vendor incentives. Going forward, management sees the secular trends driving IT spending on solutions and services as being positive and expects to further strengthen its financial results in the Canadian market with increased integration of TeraMach.
