Sylogist Ltd T.SYZ

BNN - recommended by David Barr today

[Mephistopheles3]

https://www.bnnbloomberg.ca/video/small-caps-selling-has-dried-up-david-barr~2575499

There was a segment talking about how the small caps have been hammered.  Sylogist was brought up as the poster child.

[wellheeled]

You can help Dave Barr get off his large illiquid postions in Sylogist and Copperleaf by buying some of his stock - that's his recommendation.   

[Mephistopheles3]

Copperleaf and Sylogist are quite different - I wouldn't touch Copperleaf.  The CDN tech companies that all went public in 2020 and 2021 have just been hammered and the whole sector is down.  Some of this is deserved like Copperleaf or Thinkific and some less so - like Converge and Sylogist whom are cash flow positive businesses.  The recent announcement as well of their Chief

[wellheeled]

Agreed, they are different.  Didn't Sylogist try to sell itself a few years ago when it was trading at $12? Other than the current share price being much lower, what is different now?  

[Mephistopheles3]

New direction from the company vs. a few years ago.  New CEO brought in to shake things up a bit - he has started by first investing in their product and is spending about $1 million a quarter on R&D.  Previously, the former management was just milking profits and had a really high EBITDA, but at the expense of growth.  Second, the company has really invested in their sales

[wellheeled]

Thanks for the response.  Your comments are what I thought too until further investigation.  It turns out the company has been very selective on its disclosure.   Here’s what I found out:   1. Revenue is shrinking  When you take the historical annual revenue of $38M and add the revenue of the last four acquisitions - reported to have combined revenues of $22M - you get

[Possibleidiot01]

Really appreciated point 4:)

[Mephistopheles3]

Excellent post mate, like the in-depth DD and questions as I'm always looking for holes within my investing logic as well.  I'll try to give my answers in the same order you wrote them.  1.  Organic growth is increasing as disclosed in the last couple of calls.  Mission CRM had a run rate of $890K at acquisition and Pavliks had $9.4 million annual revenue which totals

[wellheeled]

Thanks for the considered response.  I did a little more digging to confirm a few things. I was hoping for better results.  It's always nice to find gold but this looks more like pyrite.   I arrived at the negative organic growth by noting revenue was flat in 2018, 19, 20 at $38M.  Sylogist acquired 4 business since then, InfoStrat, MAS, Pavliks and the Mission.  

[Mephistopheles3]

No worries mate, appreciate the discussion. You're right in that the disclosures are limited - you have to go a bit on faith and the nuggets that you can pull up from conference calls.  Microcaps are a bit challenging to work with in my experience.  Part of the reason that they always have lower P/E and lower valuation is that there is not a lot to go on.  I would say the