Hidden Gem Primed to Move as Q comes out Tomorrow...Have had a small position in this name since Jason Donville was added to the board in 2015 as he is one of the premier names in small cap growth especially in tech.
This niche play is greatly undervalued given its cash generation ability, Apivio generated 2.833M in cash from operations in 2015. At that number they are trading at less than 6x Cashflow and trading on 11x P/E for 2016 numbers and 4x P/E for 2017 estimates and less the 8x trailing EBITDA.
The debt reduction plan continues and management has done a good job restructuring the existing debt and the interest rate. The current portion of LTD for 2016 is only 235K (2015: 1,186M). This is immediately additive to EBITDA.
The CEO was brought in to expand the existing higher margin services side of the business as well as drive the North American sales. He is putting his own money behind the company, in April 2016 he bought an additional 250,000 shares, he owns more than 10% of this company. I will bet with a guy like this every time who has a history of growing and selling a previous company.
Will be looking at the continued development of the NEC relationship with North American sales.
In 2015 N.A. sales were up to 2.852M (2014: 167K), looking for the momentum to continue as the March 30 press release already stated that there was a significant VoIP enterprise follow on order proving the adoption and transfer of the product to the North American market.
In conclusion trading at 0.25x sales when gross margins have the potential to expand to 20% from the current 17% -19% is just way too cheap given the growth potential in the North American roll out. I don’t see why we can't go up and push to 1.00 SP with execution of management and EBITDA and cashflow growth.