Replies to post #3106 on Deaf-Talk Inc. (fka MGQG)

[mrholty]

Agreed. Simply updating pinksheets.com or whatever is of minimal importance.

Priority Order for shareholders should be:
1. Financials
2. Financials
3. Financials

Priority Order for Mgmt should be:
1. Grow the business.
2. Grow the business
3. Release the Fins.

If they truely see the growth opportunities they feel is out there than this should be job #1a and 1b. To be honest, when you talk to them and then go out and research their penetration of the total # of hospitals in the US they have a minisclue Market share.
I am hoping to see YOY growth of 10% which while not huge is understandable and consistent. Taking it one step further, there are signs that they are growing their sales staff greatly as a % and also in a new market area (South). I hope that this is phase #1 of growth.

Simply put this business is a pretty levered business. You have Interpreters at remote locations that will provide signing services. These are pretty much a fixed cost but for every contract that you add you probably don't have to a commensurate size of interpreting staff.

While in the past this software used to be unique and probably costly I expect that the technical service is now pretty cheap of which they can outsource. This means that the business is all about leverage.

A former HS girlfriend knew ASL so when I started to invest in this company I looked her up and sent her an email (Ain't Facebook wonderful!). She still does some Interpreting on call to places such as hospitals, courts, etc. She contracts through a local company which the local hospitals use and her pay rate is about $50/hour and billing rate to the hospital is about $70/hour. This includes her travel time. She looked at the company and warned me that this system while a cost savings to the hospital does not provide the on-site personal service that her sort of service provides. She's right. But she is also protecting her job, she and my wife (Physical theraspist in a clinic) both see the value of DTI as a additional service that complements on-site ASL interpreting.

I expect that these units would be used in a Emergency room setting where the monthly costs and service is very low compared to other equipment and the cost vs potential litigation cost is very cheap. Once the patient is discharged from the ER to a hospital bed they will have the option of continuing on with DTI, an on-site interpreter who stays in their room, or a family member or someone else who can interpret. The most common is to be replaced with a family member if possible.

I try to invest in two types of companies.
1. Deep Value - usually BK type stocks or completely left for dead industries.
2. Gorilla growth companies. Stocks that can grow at 30% for a while which have network effects. DTI is such a company.