Posted: Tuesday Dec 10 7:11:09PM 2013
Does anyone know the reason for the volatility today? I began a small position today at 0.11.
Posted: Sunday Nov 3 6:07:15PM 2013
One of the things that impressed me about the company is how its increasing free cash flow has enabled it to dramatically accelerate its acquisition quest. From my notes, here is the company's free cash flow, which I'm defining as cash flow from operations less cash used to purchase property, plant and equipment:
2010 - $13k
2011 - $361k
2012 - $591k
2013 (9 months, which includes only 3 months of the Community Networks acquisition) - $1,117k
2013 Q3 (which includes the Community Networks acquisition) - $517k
Note: These figures do not include either the Hybrid Wireless acquisition which closed November 1st, 2013 (adds 400 subscribers) or the Pathcom Wireless acquisition to close mid-January 2014 (adds $3.5M in revenue).
It has been pointed out to me that my estimates for all-in after tax eps ($.02/share) and free cash flow ($.03/share) might be far too low. I've been making ultra conservative assumptions to arrive at these numbers, so my critics might be just right.
Posted: Friday Nov 1 7:56:37AM 2013
Things are progressing well at Platinum.
Today, PCS announced that it "...has closed the acquisition of network assets and customers in east-central Alberta from Hybrid Wireless Inc. for $300,000." The additional 400 residential and commercial subscribers, together with acquisitions made in the last 20 months, have increased Platinum's customer base has increased by approximately 50 per cent.
There is a letter of intent for another deal out there as well, that one costing $800,000 for a company with revenue in excess of $3.5M. Based on PCS's cash balance and cash flow, it seems to me that they can finance both of these acquisitions from internally generated funds.
The company hasn't disclosed potential profitability from these two acquisitions, but I think the following gives one a clue as to what insiders think of the company's prospects:
As of October 31st, 2013
Oct 30/13 Parkinson, Bernard - Acquisition in the public market 9,000 @ $0.150
Oct 29/13 Parkinson, Bernard - Acquisition in the public market 1,000 @ $0.145
Oct 28/13 Parkinson, Bernard - Acquisition in the public market 8,000 @ $0.140
Oct 18/13 Bobye, Wayne - Acquisition in the public market 29,000 @ $0.150
Oct 18/13 Bobye, Wayne - Acquisition in the public market 2,000 @ $0.145
Oct 18/13 Cargo, Ronald James - Acquisition in the public market 7,000 @ $0.145
Oct 18/13 Parkinson, Bernard - Acquisition in the public market 10,000 @ $0.140
Sep 23/13 Parkinson, Bernard - Acquisition in the public market 10,000 @ $0.120
Sep 10/13 Parkinson, Bernard - Acquisition in the public market 5,000 @ $0.120
Sep 6/13 Parkinson, Bernard - Acquisition in the public market 20,000 @ $0.120
From my perspective, if these acquisitions are as profitable as the rest of the company is, then earnings, including full taxability, should end up somewhere around $0.02 per share. Cash flow is harder to estimate, but might end up being around $0.03 per share.
Posted: Wednesday Oct 16 10:59:28AM 2013
Platinum Communications Corporation provides fixed high-speed wireless internet services to urban communities, towns and rural communities overlooked by traditional internet service providers.
Since a recent acquisition added a lot to net income, eps and cash flow, trailing twelve months eps IMHO isn't an appropriate measure. The Community Networks acquisition, which closed in March, 2013 probably adds about 1 cent per share in
fully taxable, fully diluted annual eps.
- The company has a recurring revenue model.
- The number of customer accounts is up by 45% over the last 5 quarters.
- Year over year revenue was up 34% in Q3 and 25% year to date.
- Fully diluted eps was up 445% in Q3 and 87% year to date.
- Gross margin is consistently around 67%.
- Expenses are well controlled.
- Free cash flow (that is, cash flow from operations less purchases of property, plant & equip) is growing nicely and is usually much higher than net earnings. This allows for regular acquisitions.
- There were two acquisitions in fiscal 2012 (year end is August), one acquisition plus one agreement in 2013 and two more acquisitions so far have been announced for 2014.
- There is substantial insider ownership. Directors own 34% of the company.
- I am not aware of any major legal actions against the company.
- The company doesn't grow much organically.
- The company does have debt of $4.8M. Normally, this would bother me, but the company has arranged all debt so that it fully amortizes (i.e., it's naturally fully paid off at maturity), so there will be no need to refinance any of it at higher interest rates in the future.
Anyway, there it is. As usual, please do your own due diligence.