RE:RE:RE:RE:A direct Proxy for DCMI have never been more confident in this name as I am now (and I have been here for a while). I speak with the company often and my sense is that they share that optimism. The operations are in a good place. Richard is driving people to achieve more ambitious goals. There's a vision from leadership to take DCM to a newer-and-better version of itself. And, the balance sheet deleveraging allows them refocus their efforts on playing offence (rather than defence). I think Q1 was a low point in EBITDA for 2021. And, it's one I'm happy with. With the slow retail reopenings, maybe Q2 is similar from a revenue perspective, but costs will come down (especially SG&A). And as we move through the second half of 2021, I can see revenues ramping and costs efficiencies flexing margins/profits higher.
I am comfortable this business can generate EBITDA of $40 million in 2021.
If you were going to value this in the most conservative fashion, you would remove $10 million, to get to a $30 million pre-IFRS 16 EBITDA.
Multiply that with a 4x or 5x EV/EBITDA multiple and subtract debt of $40 million.
You're at $2/share.
Instead the shares today trade at 2.5x -- which is a multiple that in a few months we will wonder why was so low. In this market, where most stocks (especially "story stock") feel toppy, I'm happy to hold one that has numbers that make sense and a story that will eventually win the hearts and minds of new shareholders.