I refer back to Longshot's AGM summary. With the restructuring and addition of C2B Solutions and the AddGlu innovation, if it is true that they can achieve increased ebitda in this transitional year, then I remain a bit excited about the share price potential. At 4.5c, this has a market cap at around $20m.
It's interesting to note that in 16/17, the Performance Marketing Division achieved $6m ebitda. This is what they are concentrating on, by adding C2B Solutions (which they say will add $2.5m to ebit in 17/18), plus the AddGlu innovation.
It strikes me that Performance Marketing could contribute close to $10m ebitda in 17/18. I may be a mile off the mark with that estimate, but that's what I sense reading between the lines.
They have been a little reluctant to put a number on likely ebit for 17/18, but Longshot did report from the AGM that higher ebit for 17/18 (over 16/17) was likely.
That being the case, I fail to see how this is only worth $20m. I suspect a million a month in net additional cash is within reach. Imagine that! Once they get to that sort of cashflow, this will be back at $100m+
I may be being overly sanguine here, however, this could be one of those unloved stocks which are trading at bargain basement prices. It often feels counter-intuitive to buy stocks like this. Often, we are inclined to sell because that's what everyone else seems to be doing.
I expect an important market update in the coming weeks.
I also note the new Chairman appointed late last year. I doubt he would have put his hand up, unless he saw this was a highly recoverable situation
Happy New Year to all the Holders. Hopefully this year is a lot more upbeat!
IMS Price at posting:
4.5¢ Sentiment: Buy Disclosure: Held
