Coming: A thomcalandra.com home for our expanding TCR faithful; including benefits, secrets and subscriber-only scoops. It is under construction and will feature real-time ideas for profit.
?August 15, 2014
SAN FRANCISCO -- Computer systems integrators -- known as value-added resellers -- must prove their revenues will keep coming, and coming.
It's a matter of what they call earnings or sales visibility. Quarter after quarter of sales growth using the integrator's savvy, its sales force, its consulting mojo.
In the case of the one that is getting good buzz in Silicon Valley here in northern California,
Sysorex Global Holdings (
OTO: SYRX,
Stock Forum)(appears to be well on the visibility track).
Hyperbole aside, what we have here is one of the better quarterly conference calls I've come across.
Sysorex Global, based in
Silicon Valley, California, is one of those properties that might corelate with technology themes that influence all of us. The eco-system these days in first-world economies include Big Data, Cyber Security, Mobile Computing, Enterprise Analytics, Clouds and Government Techology Upgrades.
This Sysorex (SYRX) is attempting to replicate the merger and strategy success of its predecessor by the same name 20 years ago.
The linked conference call for Sysorex has a lot: sales breakouts, anecdotes about big customers, sales cycle information and a nitty-gritty look at a company that might enjoy rapid sequential sales growth in coming months and years.
HERE is the playback of
Sysorex Global conference call:
https://client.irwebkit.com/Sysorex/events.
Sysorex Global's
CEO in this week's call goes to the mat with details about government contracts, data analytics and even forecasts of sales growth, margins and revenues. As our
TCR audience knows, we are staking the newly listed NASDAQ company, SYRX in USA, as a possible beneficiary of government agencies, technology operators, health care and even interactive gaming and consumer patterning.
I made a well publicized gambit and investment years ago in another infustry: genomic tools. That turned out to be one of my best ever.
Sysorex Global is shaping up as owning the talent and strategy to replicate that success.
Just as Sysorex's units, among them
Lilien Systems here in Marin County, California, "up-sells" clients with a suite of increasingly proprietary computer services, so must the company and its executives convince investors this is no mere sum of the parts is greater than the whole.
"We're not doing a roll up here ... but we would certainly be open to future acquisitions," CEO Nadir Ali says.
The company's growing staff might insist no one part of Sysorex is more important for success than any other. And there are a lot of parts. See
web presence.
?Those parts -- such as Shoom and AirPatrol -- are given the creative freedom to maintain their respective identities within the Sysorex holding company. When you look at the
web presence of Sysorex, for example, you get a sense how BIG this company is in the handling of government services, agencies, project management -- to mention a few. But you have to go to the other separate web presences --
AirPatrolCorp.com for instance -- to get a sense of the technology reach of the growing services company.
Precise location technology and data storage are themes for AirPatrol, which has about 15 patents.
Location is almost everything, the disparate Sysorex companies believe.
Still, for my money, and the money of our
TCR family, it is the unit I have known for 18 years, via a friendship with the principals, Lilien Systems, that is one key to powering greater sales.
Lilien Systems uses its sales-targeted computer consultants to cover the map for clients, such as Caesars Interactive Entertainment of Quebec, Canada. "It up-sells data-analytic services," among other features, Mr. Ali says.
The key word Mr. Ali uses is "tailoring" services in its reach for mid-sized and large corporate and government contracts.
"Better than expected gross margin at Lilien" is, I believe, responsible for company guidance that sees continued smooth and rapid growth toward net income.
Thus far, I like the improved profit margins -- 33 percent. Sales were $17 million for the quarter. Shoom and
AirPatrol contributed to the revenue pie in the quarter.
Please go through the numbers -- just by listening to that call. Especially the questions at the close of the call.
It is a wonder that Mr. Ali reveals so much about the strategy that could see Sysorex becoming one of North America's leading systems integrators.
Sysorex Global Holdings ? Quarter Ended June 30, 2014?
Sysorex's chief and son-in-law of the original Sysorex founder in the 1970s to 1990s success story, Mr. Ali, does a thorough job of describing the strategy of acquisitions for Big Data, government services, cloud computing and (AirPatrol) mobile security and wireless computing for ID and other purposes.
That dad-in-law,
Salam Qureishi, is still involved, as chairman of the new Sysorex. The previous incarnation was a D.C. affair called Sysorex Information Systems, and it sold to Vanstar Corp. in 1997 in a transaction that was profitable for all.
The current SYRX $4 shares on NASDAQ are an investment in a thesis we have pinned at
The Calandra Report for almost a year now: a growing sales multiple based on the acceleration of sequential quarterly numbers and perhaps even higher profit margins. Even a single-unit gain in that sales-to-stock-price multiple will result in another $80 million of market cap for the currently $80 million company.
We will look at this Sysorex strategy in six months and likely see a company easily running an $80 million to $90 million real-time yearly sales pace -- and far more on a forward sales basis.
In future, I am hopeful Mr. Ali and his team will turn to video for more of its educational and financial calls to shareholders and the public.
I own Sysorex and have been purchasing more as I can every month.
Speaking of video: This next one is pretty encapsulated. In fewer than 2 minutes, you get a sense what
Kaizen Discovery (
TSX: V.KZD,
Stock Forum), a relatively newcomer to the public markets, is pursuing in its mineral exploration and financing efforts.
Kaizen's CEO,
Matthew Hornor, explains how the small Canadian company is building its plan to locate precious and specialty metals around the Pacific Rim for sale to Japan and other manufacturers.
September 25 and 26: At the Cambridge House Canadian Investor Conference, Sheraton Toronto Centre Hotel. Kaizen's Mr. Hornor and others will participate in a discussion of the volcanic "
Ring of Fire & Its Emerging Investment Opportunities." Thom Calandra is moderator. Sept. 25 at 1 p.m. Toronto time.
-- Thom Calandra
THE CALANDRA REPORT
$129 yearly: Does Not Recur
THE CALANDRA REPORT
$129: Will Recur Yearly
www.thomcalandra.com
New?! MOTIF INVESTING -- Ruffled Resources basket
New Orleans conference in October: Come!