KGIC Inc LGLTF

RE:RE:Housing and Franchising Revenues

[skiboyy]

britishcinnamon wrote: I do not personally think that housing and franchising is a concern for investors. It is supplementary to the main focus of the company, which is ESL and professional training. The company's growth is determined by its ability to acquire and integrate schools.

As said before on BNN, LOY is in the midst of digesting its 2013 acquisitions, which are the biggest to date. If you look at a lot of the liabilities and costs from Q413, Q114, and Q214, you would see that the margin is mostly eaten away by overlapping fees and severance packages. These costs cannot go on for much longer. If you look at liabilities in Q1, the company states that a lot of overlap especially attributed to advertising will decrease by the second half of the year. Advertising fees account for a 1,000% increase year-over-year in terms of costs. It is a big burden. 

Given the strong amount of institutional buying from Beacon and Paradigm, as well as the insider buying by management, I see no reason to be concerned over housing and franchising revenues.

I see quarter-over-quarter improvement consistent over 4 quarters. I also see improved margins and profit since Q4 of last year. The share price may not always reflect the fundamentals of a company on paper. The reasons can be macroeconomic or otherwise.

I have a long position with the company, but I am mostly liquid. I daytrade in and out of LOY with my small position on the side to take advantage of this erratic year. I still maintain that the best mostly comes in anticipation or in reaction to Q3. That is the strongest quarter for ESL.

This is very well said. We have to remember the last year has been the biggest for loy acquisitions. I think firstly, the market has been waiting to see how the company will handle them plus we have seen a strong case of sell in may/summer doldrums for loy. I am confident we will see more positive news releases and great quarterly growth. I am long for loyalist just based upon the fact that revenue has grown huge and expenses will start to be decreased once growing pains are dealt with.  At the end of the day cash is king.