It's been a while, almost 2 years since writing a post on ADJ, and two years on from my original post when we finally had some hard numbers released.
"Finally some hard numbers, hope most of you held !!
'Expected cash inflows of $1.6m to $1.7m for the June quarter, representing an increase of 15% to 22% over the March quarter • Expected net cash outflows of approximately $1.7m for the June quarter, representing a 50% decrease versus the March quarter'
Fast forward to today and the last quarterly stated
"YTD cash receipts are $8.56 million, an increase of 49% or $2.82 million from the corresponding period last year".
Aside from far to many shares on issue fundamentally it looks good.
The management have put in a earnest effort to grow this company to be become the major player in the digital media industry. I can't really fault that side of it.
They are conscious in keeping costs to a minimum, yet trying to grow and spend on R&D ensuring they keep developing their platform to enable continued growth of large scale transactions seamlessly.
Having grown revenues from 2 mill in 2014 to 8 mill 2016 is not to be overlooked. I cannot be sure, however there is plenty of encouraging reasons to believe they will grow a lot larger than they are today.
The industry itself is still in it's infancy, there is enormous potential here.
I still think this stock will be a 3 bagger, however I think it may take more than 5 years.
Barlow and Giles are the brains child behind Adslot, they have a track record for growing IT companies and selling them, I think that their is a possibility that will be their goal with ADJ.
The directors are an impressive bunch, all of which continue to hold their stock.
If they hold up here their market cap will see them reintroduced back into the ASX 300.
There is still no small cap investment funds on the share registry, as a long term shareholder I look forward to the day when they do begin to buy and hold a small percent in ADJ.
I cannot be entirely sure, however in some posters questioning if this recent rally is nothing more than a pump and dump following the most recent capital raising, I don't think so.
The major difference is that NOW they actually are making sales revenues which are growing substantially, with huge potential for ongoing future growth.
"Adslot is in the final stages of negotiations with a major international media-buying organisation to enter in to a multi-year agreement covering several foreign markets. It is anticipated the agreement will realise a material increase in Trading Technology revenues for Adslot. Adslot will keep the market informed of any significant developments in relation to this negotiation and notes there is no assurance negotiations will culminate in a final binding agreement between the parties."
I believe that this disclosure to the market is why ADJ have not received a speeding ticket.
Looking forward I can't really see why ADJ won't continue to grow revenues substantially, and for years to come, given that most of the market they aim to capture are yet to adopt this form of media trading.
If this announcement is revenue growth substantial, it potentially may push through the previous high of .17 if not, I believe for now, the significantly improved fundamentals of revenues, quality of clients, sector outlook support a price anywhere between .10 and .20
Good luck to those holding, it's an exciting space, and finally moving, just remember that when IT stocks start to grow it's nothing for stocks to be priced anywhere between 15 and 25 x earnings.
Always do your own research....
ADJ Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
(20min delay)