Financial Analysis, page-289

Definitely a very interesting value that the market has given to this stock.

I was sitting on the sidelines for a while, but decided to jump in recently for an average price of around 29c.

I think the case for investing in this company is still pretty strong on a qualitative basis.

1. They have a duopoly in the ANZ region with Streem. Sure this hits margins in the short term, but will stabilize over the longer term (I believe) as Streem increases in size and complexity of the organization, and as more automation / cost cutting takes place.

2. This is backed up by customer churn numbers staying not too bad in ANZ, with the main revenue hit coming from pricing rather than customer loss.

3. Asian market is still growing, with penetration from competitors like Meltwater / Streem will be difficult as gaining share in this region requires more resources (manpower) and sales networks which Isentia has an advantage on.

4. Meltwater doesn't seem like too much of a problem in the ANZ region yet, they are having problems meeting some of the contract requirements with the NSW gov contract, plus Isentia is still winning contracts. Isentia will still be needed for the whole media focus and not just the socials. Like it or not, there are still a lot of older Australians that consume a lot of traditional media.

5. Technology is catching up with competitors. Looking at their job advertisements / tech stack, it seems decent and that they are on the right path (my opinion as a software engineer).

6. Cost cutting can maintain the cash flow in the region of ~7M debt paydown this year, ~10M debt paydown next year from my estimates. More than enough to give them time to maneuver to the new strategy with the new management team.

Given the fact that the general market was so irrational on the way up (including institutions), it doesn't seem so far fetched that the market can be very wrong on the downside too, especially with the stock exiting the indexes and on a big downtrend. The market is an extrapolation machine, just need to see where its extrapolation might be wrong.

I am happy to take a shot at this, maybe I lose, but maybe the SP can x3 from here (or more) and I believe the odds are in my favor.

Besides, the best learning moments are from failure so bring it on!