Commentary: Clarocity Primed for Performance I got this note from Virtus Advisory Group, CLY's IR group this morning that I signed up for. Thought I would post it here. Seems like they have a good view of what's going on. These are the same guys that work with AcuityAds (up ~350% since January 2016) and Symbility Solutions (up ~100% since mid 2016).
Commentary: Clarocity (TSXV:CLY) Primed for Performance
Turnaround stories provide a real opportunity for investors to make money, but timing is always key. We strongly believe that it is time for investors to take a serious look at Clarocity (TSXV:CLY). Clarocity, a provider of real estate valuation and appraisal software and services, has been tremendously ignored by the market at large for exceptional strides made in the company over the course of 2016, particularly the latter half. The company spent most of 2016 building a solid foundation and after performing consistently over the last 3 months while achieving significant milestones, we believe now presents a critical entry point for investors to get involved in a story that we expect to grow at an exponential rate in the coming months. Let’s quickly take a look at where the company stood in 2015 before we even consider what happened in 2016:
· $3.2m in revenue for the year ended December 31, 2015
· $1.3m in revenue in Q4 2015
· Share Price December 25, 2015 - $0.08
For a more recent comparison let’s take a look at the company’s first 3 quarters of 2016: a total revenue of $4m. While Q4 2016 results have yet to be reported, management has painted a picture of what we can expect. The company has reported revenue on a monthly basis since November 2016 of $1.1m, $1m and $1m respectively. In the the last 3 months preceding February 2017, the company has almost matched 9 months of revenue in 2016 at $3.1m combined.
That’s a run rate of $12.4m, almost 4x what the company did as a whole in 2015.
Make no mistake about it: this is a turnaround story if you’ve ever seen one.
Let’s look at what has happened since mid-2016.
· Clarocity acquires ValVets, a national AMC that is well established and provides them the necessary licenses to operate across the US.
· ValVets receives a contract for $12m over 3 years with a minimum of $6m committed for 2017
· In January 2017, Clarocity announces a contract with a Top 10 internet lending company
· In February 2017, Clarocity announces a contract with a Federal U.S. Government Department
In the latter announcement, the share price moved a meager 11%. We wholeheartedly believe that the market has essentially ignored the unbelievable progress that the company has made in the last 6 months. However as important as these milestones are, we believe this is only the mere beginning of what we can expect out of the company.
December 2016 and January 2017, as promising as they seem, are far from indicative of what we believe will be coming out of the Clarocity pipeline in the coming months. Expect to see new large contracts, continued top-line growth, and tremendous growth in the use of Clarocity’s alternative appraisal products. With what we believe to be coming out of Clarocity, and the continuous support of StableView Asset Management, we believe investors have a prime opportunity to get in early on a company that we expect to continue growing on a monthly basis.
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