DTS and DMP are two very different businesses which attract two...

DTS and DMP are two very different businesses which attract two very different types of investors as well.

DTS is a small cap tech startup that still hasn't proven they can be profitable yet.
DMP is a highly profitable business with a very reliable business model (fast food franchise).

DTS investors are looking for their 3-5 bagger.
DMP investors are looking for their steady 10-15% YOY growth.

Two very different types of investors.


In regards to DTS specifically, I actually looked at them 2 1/2 years ago in 2018 and when I ran the numbers, it didn't look good.

I quickly glanced in their 2020 Annual Report and they are still in the same situation as back then. They are still highly unprofitable. Burned $3.5m with $2.2m cash which means they are still on the capital raising train.

Here is my quick back of the envelope calculation:

Market cap: $45m

How much profit do they need to justify a $45m market cap?

Assuming 20% margins and 20x PE...
Sales: $11.25m
Profit: $2.25m (20% margins)
Add in a 20x PE, you get $45m.

Their sales in 2020 is $1.45m. Based on my valuation method, they would need to almost 8x their sales for me to even consider investing in their stock today.

And this isn't taking into account, DTS will continuously issuing more shares which increases their market cap which pushes the benchmark higher.

That's how I look at it.