RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Q1 FY2015 Valuation Updatelogical_thought wrote: P.S. Stockhouse Mania: when you say you will "slowly sell your shares at whaever good price you can get," I'm not sure what price you have in mind but as you sound somewhat anxious to get out of them there may be no need to do it "slowly." I'll happily buy a big chunk of them (and perhaps all) if I like the price so put up the block at an attractive figure on Monday morning and if it's cheap enough maybe I'll buy them. I noticed a 100,000-share bid (not mine) all day on Friday that you (or anyone else) didn't seem to want to hit. So for a guy who seems to want out, you've certainly got a chance right now.
I'll be bidding against you if it goes sub .30 again. I built my position during last year's freefall sub .20, so I already took some profits as growth has stalled. There are some red flags that prevent me from digging in too deep. None of them is substantial enough to warrant Sangoma's current stock price, but they're still red flags.
1) Lack of insider purchases at what appear to be firesale prices. (As I've mentioned in previous posts.)
2) The change to the BOD in the summer. I can't wrap my head around the new board appointment. Everything I read indicates that he was (and still is) involved in scammy business. This is probably nothing to worry about. I'm just overcautious and have seen plenty of nonesense with Venture companies.
3) The aging receivables. Every Q they take further provisions. This is very new for Sangoma. Their push into developing countries in search of revenue has clearly decreased the quality of that revenue. Note that sales in North America have fallen off dramatically.
4) Employee turnover seems high for a small company. (I don't have hard numbers. I've just seen very substantial turnover via LinkedIn.)
5) Transparency. They don't disclose the numbers required to make an honest assessment of the business. (Ostensibly for competitive reasons.) We're repeatedly told that "new products" account for "slightly less than half" of revenue. This isn't very helpful, given that "new products" include plenty of TDM-related stuff that is in terminal decline. The phrase "slightly less than half" is also open to interpretation. I'd wager that 41% would be considered slightly less than half.
6) Express for Lync. This was a very important product for them. They were first to the market, but it clearly hasn't gained traction as they had hoped, and it appears competitors have now caught up with similar offerings. I think the ship might have sailed on this one. It appears that they've cut back their sales efforts in the US, which were targeting Microsoft Gold partners.
On the flipside: It's dirt cheap by pretty much any financial metric and the founder holds 19%.