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Bullboard - Stock Discussion Forum illumin Holdings Inc T.ILLM

Alternate Symbol(s):  ILLMF

illumin Holdings Inc. provides a journey advertising platform, which enables marketers to reach consumers at every stage of their journey by leveraging advanced machine learning algorithms and real-time data analytics. It enables advertisers to connect intelligently with audiences across online display, video, social and mobile campaigns. Its Programmatic Marketing Platform, powered by machine... see more

TSX:ILLM - Post Discussion

illumin Holdings Inc > Mathieu Martin - Sticks and Stones - Deep Value?
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Post by Possibleidiot01 on May 23, 2024 10:27am

Mathieu Martin - Sticks and Stones - Deep Value?

 
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There are multiple ways to make money in the market.
So far this year, a few pockets of the microcap market have done really well, with some stocks exploding higher.
I was curious to see if I could find any common denominators between stocks that are up more than 60% year-to-date.
This list is not exhaustive; I based it on stocks I know well and follow (so I hopefully have something intelligent to say).
I found 15 stocks that I grouped into four buckets.
I'll cover the first two buckets today and the remaining two next week in Part 2. In each group, I'll also provide one or two ideas that could be next up.
Let's dive right in!

#1 Institutional-grade Microcaps

This category is about well-established businesses with a track record of revenue growth and profitability. When institutional investors come down the market cap spectrum, these high-quality opportunities tend to attract capital. And if they need to raise capital to accelerate their growth, that's even better as it provides a liquidity window for big money to get in.
Recent examples (with YTD returns) are:
  • Kraken Robotics (TSX-V: PNG) + 63%
  • Vitalhub (TSX: VHI) + 74%
  • Tantalus Systems (TSX: GRID) + 91%
  • Zedcor (TSX-V: ZDC) + 112%
These companies all took advantage of their share price increases to announce bought-deal financings in the last two months or so. Some will use the capital for organic growth, while others intend to do M&A. Either way, the capital should fuel more growth, and that’s what investors are looking for in microcaps.
What could be next?
  • KITS Eyecare (TSX: KITS): Although the stock had a phenomenal performance in 2023, it's flat in 2024 despite continued execution and revenue growth. Several analysts cover the company, which is clearly on the institutions' radar. Given the high insider ownership, the stock is relatively illiquid. If there's another leg up in the stock, I suspect KITS could raise money and allow more institutions to get involved, fueling further share price increases. It looks like a prime candidate to follow the playbook of the four companies highlighted above.

#2 Deep Value

This group is pretty self-explanatory. The stocks have been extremely cheap, trading for as low as 4-5 times EBITDA. Suddenly, they show one impressive quarter, and the market wakes up.
Recent examples (with YTD returns) are:
  • Tornado Global Hydrovacs (TSX-V: TGH) + 81%
  • Biorem (TSX-V: BRM) + 97%
  • BQE Water (TSX-V: BQE) + 115%
  • Ztest Electronics (CSE: ZTE) + 229%
What could be next?
  • Covalon Technologies (TSX-V: COV): Covalon is a medtech company with a few proprietary/patented technology platforms. Revenues have been growing lately, the balance sheet is solid, and the company is approaching profitability. A new CEO with deep industry experience took the reins earlier this year. Based on my sum-of-the-parts analysis, I believe the stock is extremely cheap, but it’s illiquid with no clear catalyst. One or a couple of solid quarters could be the spark that investors need.
  • Illumin Holdings (TSX: ILLM): Illumin is an adtech company, and adtech isn't the most popular industry these days. After a massive bubble in adtech valuations in 2020-2021, the stock was taken to the woodshed and declined 95% from its peak. The company has been heavily investing in the development of a new self-serve platform that's starting to gain traction in the market. The balance sheet is rock-solid, with $55 million in cash and no debt. The valuation currently stands at 0.3x EV/Revenue (2023). Illumin has been generating 15-17% EBITDA margins in its good years. If they can return to those metrics (a big IF), the stock could trade for something like 2 times EBITDA.
I'm sure I missed several opportunities that fit in those first two buckets. If you know one, please share it in the comments section so all readers can benefit!
And stay tuned for Part 2 next week, in which I'll cover the remaining two categories and offer a few more ideas!


Comment by mofwmofw on May 30, 2024 10:20am
These people obviously don`t know that the $55,000,000 in cash they say is rock-solid, was falsley raised a few of years ago and was over $100,000,000, soon to be gone within a couple of years. Don`t take my advice, do your own DD, but do it extensively and you will find what I found and know. Of all companies on the TSX, this should have a CROSS_BONES beside it !!!!!!!!
Comment by Possibleidiot01 on May 31, 2024 11:18pm
Balance sheet is rather interesting .             March 31,2024                                                ...more  
Comment by mofwmofw on Jun 01, 2024 7:15am
That's definitely part of it as far as I'm concerned this company is nothing butt smoke and mirrors riding on the backs of the big companies that do 99% of the advertising
Comment by Torontojay on Jun 03, 2024 2:56pm
  They are buying back stock but the share price continues to crater. Imagine what will happen when the cash is depleted and they can no longer support the stock price.  There should have been a lawsuit filed against these guys. They swindled investors with nothing but false hopes and dreams. There is nothing disruptive or good about their technology. 
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