More to watchQ4 results coming 17 November. Concerned that gross revenue will not break out of its 10 year barrier and that cash/near-cash will remain the elephant in the living room.
RDM's management appears to achieve something of a miracle: it essentially delivers profits employing only about one quarter of the company's total assets. The red flag for investors is that the company's cash holdings, which have more than doubled since 2011 and which do not appear to be materially utilized in the firm's day-to-day business dealings, now represent fully 75% of RDM's total assets and yet generate only a tiny contribution to income. Over the last six years the average annual cash holding has equalled approximately $22 million and this has generated average income of only $72,000 annually.
Gross margins on payment solutions activity now run to almost 70% but the return on 75% of the company's total assets is little better than .33%. The company has shown itself to be a modest winner in a very competitive sector but it has yet to show how it could be a champion if it engaged and maximized all of its resources. Must wonder what it's going to take to get it there.