RE:RE:Quarterhill predicted to double in price in 2020Historically, holding companies trade at a discount to the sum of its parts.
Especially ones that are not growing revenue or worse, have negative rev growth.
QTRH rev was down huge in 2018 vs 2017 ($77M vs $135M).
The following are guesses only..... For Q4, if IRD & VIZ maintain same rev as Q3 and Wilan rev comes in at $24-$25M, total revenue for 2019 would come in at $154M.
That would be double the revenue of 2018. Instantly, QTRH would get noticed!
Holding companies can trade at a premium, IF they can show double digit growth Y/Y.
How would you keep it going without depending on Wilan and it's hits & misses?
QTRH needs to buy a company with the Cash on hand.
Very difficult these days to find companies like IRD & VIZ for the price they paid for them.
Valuations have gone up since they purchased them.
Here's what I would like to see;
A transformational buyout of a larger company with revenue of appr $100M/yr.
Now that gets you to $200M+ rev/yr, even in a soft Wilan year.
With a decent Wilan year, rev could be $250-$300M (cont.gowth of IRD/VIZ as well).
Companies like that can go for $200M+ (depending on historical yearly EBITDA avg).
QTRH can use a combo of Cash, Debt, Stock (if share price ever goes up)..
Cash on hand is nice to have when calculating NAV but you really need to use it to grow the top line if you want to trade as a premium tech stock.
IMHO