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Daegis Inc Message Board

friendofthetrend 110 posts  |  Last Activity: Jul 11, 2016 1:07 PM Member since: Jan 5, 2001
  • Reply to

    Interesting Read

    by arxxmuse Jun 22, 2016 1:34 PM
    friendofthetrend friendofthetrend Jun 23, 2016 9:00 AM Flag

    I just checked into Regtech. Funny how Regtech has been touted as "rising from obscurity " to become "the next big thing" and Mitek happens to be right there, mentioned in the discussion.

  • Reply to

    Good price to be buying?

    by smallcap_777 Jun 22, 2016 9:28 AM
    friendofthetrend friendofthetrend Jun 22, 2016 5:48 PM Flag

    It's too early to say what will happen with Xcede. But it's being covered in marketing reports.

    ****

    PUNE, India, June 9, 2016 /PRNewswire/ -

    2016 Hemostats Market Pipeline Assessment and Development Covering 32 Companies
    ***
    The report enables readers to formulate significant competitor information, analysis, and insights to improve R&D strategies, identify emerging players with potentially strong product portfolio and create effective counter-strategies to gain competitive advantage, identify and understand important and diverse types of Hemostats under development, develop market-entry and market expansion strategies, plan mergers and acquisitions effectively by identifying major players with the most promising pipeline and do in-depth analysis of the product's current stage of development, territory and estimated launch date.

    Hemostats Companies and Product Overview discussed in this research are 3-D Matrix, Ltd., Advanced Medical Solutions Group plc, Anika Therapeutics, Inc., Arch Therapeutics Inc., Argon Medical Devices Inc., Baxter International Inc., Beth Israel Deaconess Medical Center, Inc., Biomedica Management Corporation, Biom'Up SAS, Cellphire, Inc., Covalent Medical, Inc., Covalon Technologies Ltd., CryoLife, Inc., Endomedix Incorporated, Entegrion, Inc., Ethicon, Inc., Floralis S.A.S., Gamma Therapeutics, Inc., Haemostatix Limited , Hemostasis, LLC, KeraNetics, LLC, LifeBond Ltd., Remedium Technologies Inc., Rice University, Samyang Biopharmaceuticals Corporation, Sanofi, Sea Run Holdings Inc., St Teresa Medical, Inc., Suneris Technologies, Inc., The Medicines, Therus Corporation and Xcede Technologies, Inc.

  • In five years or so the goal seems to be to have another business unit that equals Transportation but is scalable and has up to 80% margins.

    They've had the Transportation business for about 23 years and ClearAg just may surpass it in 4-5. Still a lot of risk about that but not about the R&D drain being for naught. The light is at the end of the tunnel, for sure.

    Many ClearAg deals in pipeline. But often each deal rolls out in a limited way at first. Then it's expanded. For example BASF is using Clearag for hail and internally for their own sales advisers. That is very limited given the footprint of BASF.

    This will take a while to get to critical mass and EBITDA positive. But ClearAg will go from a big drag to the opposite. So the effect will be sweet to watch if it happens as they seem to believe it will.

    They report 85% of trials result in a positive response as opposed to a "no". This tells me ClearAg has legs and could, in time, go all the way to exceed Transportation.

    Looking at the non- ClearAg part of the business, the fat backlog says it all. It's growing. Initiatives in S. America and other drivers. It's looking good.

  • THE STOCK MARKET VALUATION OF
    RESEARCH AND DEVELOPMENT
    EXPENDITURES
    Louis K.C. Chan

    Excerpts:
    Two glamour stocks, one with high R&D spending and the other with no R&D, may
    appear to be equally expensive under standard criteria such as price-to-earnings and price-to-book
    ratios. However, the market seems to underestimate the future opportunities associated with the
    first firm's R&D spending, relative to the growth opportunities of the second.

    Similarly the market gives insufficient credit to past losers who continue to invest heavily in R&D. Given the pressures such firms face to cut costs and raise earnings, a high level of R&D spending is an indicator of
    managers' confidence that future prospects are likely to improve. Nonetheless, the market tends to
    overlook such signals (just as it tends to discount other indicators of managers' optimism such as
    stock repurchases and insider trades).

    **

    Given the uncertainties surrounding the results of R&D, however, it is also possible that the market may simply ignore any future benefits.

    This is the case even though the benefits are long-lived, and hence at least part of the spending is more appropriately treated as a capital expenditure. As a result of the expensing convention, some yardsticks commonly used by investors, such as price-earnings ratios and market-to-book ratios, are misstated. In particular, many R&D-intensive companies may appear to be priced at unjustifiably high multiples, so they
    appear to be "expensive" by such criteria.

    **
    If, for example, investors value a firm at a fixed multiple of earnings, the distortionary effects of R&D expensing may lead to mispricing. Similarly, some have argued that stock market investors are myopic and fail to reward businesses for long-term investments (see, for example, Hall and Hall (1993)

  • Reply to

    Good price to be buying?

    by smallcap_777 Jun 22, 2016 9:28 AM
    friendofthetrend friendofthetrend Jun 22, 2016 1:14 PM Flag

    If you have as many shares as Mr Sulick has and the balls to invest in Xcede the way Mr Sulick has invested in it, you should have access to CFAs who are not out of their depth when it comes to these things.

    My analysis is seat of the pants, based on years of micro cap losses as well as gains, mistakes and winners. I couple that with books I've read, to go along with one year of accounting and some worn out rosary beads for times of insanity and doubt.

    Sulick thinks the stock is undervalued. By saying that, he says his analysis takes him to a different value than the market's $1.30 a share. Well I don't think too many micro cap CEOs say their stock is overvalued but still...

    ...look at ARTH and DYSL-- something is out of whack. Maybe ARTH is overvalued. Maybe it's a bad comparison. Maybe there is something we are all missing.

    I just don't think the ARTH product is so much further along and so much more valuable that IT'S EV should be THAT MUCH higher than the combined EV of all Dynasil companies--- TOGETHER!

    Maybe it has to do with a lack of core focus. If you look at DYSL as having an opportunistic, incubator component to it's business model, then Xcede fits with that core. But if the investment community and shareholders are just scratching their heads, wondering what to do with it and then they listen to the CC and Mr. Sulick too seems to be wondering what to do with it, then the market won't give it much value.

    But to give it small value may be a big mistake-- to be regretted at a later. I can see value there.

    So we may have more clarity when they get financing.

    The new web site you've been clamoring for may help a lot. Give a little patience for them to get it right.

    Dynasil, Hilger, RMD have a good brand when it comes to bids on jobs. But there is zero
    Dynasil "brand equity" as far as bid and ask on the stock. Check brand equity's definition.

    The right web site could go a long way towards redeeming a cohesive brand.

  • friendofthetrend friendofthetrend Jun 22, 2016 11:43 AM Flag

    I didn't even read it till just now. I thought it was going to be an in depth Barrons report. Nevertheless this is very good.

    There is something magic about $100M in sales when it comes to analyst coverage and institutional investors. So it's nice to see the mere mention of that number.

    The fact that analysts will probably start coverage should do well for the stock. Interest is gathering. That much I can feel.

    Investors are slowly starting to feel confident enough to view ClearAg as an asset and something that could be be justifiably capitalized, as opposed to an expense and a drag on profits. Accountants will always expense it but that's what can help create hidden gems.

    Ken Fisher looks hard at Price to R&D and Price to Sales. It's a sort of value investing with a possible driver in growth as R&D pays off. ITI fits the thesis in a few respects.

    It's not going to happen overnight but I can feel the pipeline. I think ClearAg is going to be locked in with a lot of big players. Product Life Cycle is just beyond venture capital stage. It's a good time,

  • friendofthetrend friendofthetrend Jun 22, 2016 10:57 AM Flag

    WOAH!!!!! Hang on to your shares.!!!!!!

    It may get toppy. We may get some froth that will later have to be worked off but this is getting exciting.

  • Reply to

    Good price to be buying?

    by smallcap_777 Jun 22, 2016 9:28 AM
    friendofthetrend friendofthetrend Jun 22, 2016 10:48 AM Flag

    Funny I was just thinking about adding. I think you have to take Xcede as a serious solution for a pretty big market.

    Check out statistics on ARTH.

    Someone could buy ARTH for $55M and then you'd have to pony up the negative cash flow of $4.76M on an ongoing basis.

    Or you could take out a loan for $29M buy DYSL and use the$.9M positive cash flow towards paying interest on your loan.

    Next you'd secure financing for Xcede. Take a loan for $26M. The interest on $26M, even at 10%, will be way less than $4.76M. It's a better deal by far. You'd have $55M invested either way. But you'd be starting with $26M in cash with DYSl and next to nothing with ARTH.

    In reality, you could take out a loan for $7-$15m to get yourself up and running with Xcede and worry about the rest later.

    Management thinks of Xcede as an asset or they would not have done what they have done and continue doing. An asset is something you use to make money. You capitalize assets. Xcede is an expense for the accountants spitting out Income Statements. But it can be thought of an an asset.

    So it is tempting to have a position. The risk is in how well you think Xcede will do.

  • Reply to

    Finally open road

    by boardwalk97 Jun 20, 2016 10:20 AM
    friendofthetrend friendofthetrend Jun 20, 2016 5:19 PM Flag

    Nice breakout. Early stages of PLC (product life cyce) Should to get to a tipping point some time in not to distant future. Explosive growth curve should be ahead. May take a while. Big addressable market.

  • Reply to

    ICM Orange county

    by friendofthetrend Jun 17, 2016 11:12 AM
    friendofthetrend friendofthetrend Jun 20, 2016 4:36 PM Flag

    CEO says losses will "trail off" and we'll "start seeing less usage of cash". Transportation earnings have been used for investment in ClearAg. We are seeing the light at the end of that tunnel.

    The backlog will become revenue throughout 2017.

    Sales are growing every year. Headcount is up. The company is bigger. The only shrinkage is the float.

    Late 2010, they bought Meridian for $4M cash plus a $2M earn-out. That company did road surface weather conditions. The money has been going into retooling and expanding that business to take advantage of an Ag opportunity that lies 1 ft. and beyond the roads. Many more millions were poured into that business. It shows up as an expense but management sees it as an asset or they would not be expanding it.

    Iteris grows backlog and rev and uses the margins to create, really, a whole new, fully staffed business unit that may some day have bigger margins to provide more growth. The PLC (MBA lingo for product life cycle) for their digital Ag solutions is just starting.

    "Brand equity" seems to be rising for ClearAg. There are many trials. 85% come back with encouraging results, if not actual contracts. Each prospect does their own evaluation but when you see other companies signing, there must be a psych component-- "maybe we need this to compete". The words "tablestakes" and "tipping point" come to mind. But the new BU is still tiny and PLC is still close to "big bang" stage, so there's still risk.

    I never heard so many analysts on a call for ITI. I think you could call the phenomenon a rise in "strategy equity".

    BTW, "brand equity" is "the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself".

    So customer perception of digital Ag and ClearAg is up, investor perception of the decision to invest in ClearAg is up too. Excitement is up. ITI is up. Sweet!

    Besides all that, there's more buyers than sellers,lol!

  • friendofthetrend by friendofthetrend Jun 20, 2016 9:27 AM Flag

    EY award is a big deal. The people in GTT are a cut above.

    I just read "The Red Thread" by H. Brian Thompson. Anyone with a long term position in GTT should read it. The red thread that runs through GTT is the return it gets on on intangible assets--namely the human assets.

  • friendofthetrend by friendofthetrend Jun 20, 2016 8:56 AM Flag

    I wish I were able to attend tomorrow's Annual Meeting. I wish people would press for an update of the website. It was good for it's day and had some compelling and valuable information. But a modern site is necessary for a company associated with the latest treatments. People looking for $25M medical equipment shop online like everyone else. No eye-catching picture of a Mevion or Icon?

    (The website is an extension of the brand image and product. The ASHS "product" has a lot to do with acquiring the use of some of mankind's best answers to cancer treatment, helping health providers help patients live, modernizing treatment centers, being on the cusp, gaining prestige. Another aspect of the ASHS brand is easing a difficult journey toward a better future, being a reliable, credible, long term, stable, attentive, knowledgeable trusted adviser- a steady hand. I'm not feeling any of this oozing from the pages of the website. Another thing: restraint is good but it needs more of a sales pitch going on. A call to action.
    Investors like sizzle too. Maybe the opening focal point should be the new "brand equity" ASHS has earned with the Orlando opening--- highlight a testimony regarding that installation. Emphasize the unique, valuable experience ASHS offers. Relish in that success for a while. Mention the Biden Cancer Initiative and associate the brand with the larger picture.)

    I notice Providence Proton therapy has a logo. There's a feed to proton therapy news. Their website is copy-written 2015. ASHS is 2010. More could be done.

  • friendofthetrend friendofthetrend Jun 19, 2016 6:41 AM Flag

    When MD was a new product Mitek needed channel partners--sort of wholesalers/ distributors to get to market.

    I'm thinking that these intermediaries took as much as possible and dictated terms because they had the power to demand as much margin as possible.

    Maybe they demanded contracts that , still to this day, leave little room for Mitek to up prices.

    So we see recent mention of a billion checks saving a billion dollars for banks on deposit costs but we do not see anywhere near that going to Mitek.

    The new verify products are being sold direct. I'm beginning to see why.

    MD is useful to Mitek as a sort of vehicle for circumventing the too powerful channel partners. There is no question in anyone's mind that Mitek was the smartest kid on the block to come up with the idea of MD and in spite of all the lawsuits, there's no denying the product is a winner.

    Mitek goes direct to their existing customers- 5000 banks- and offers solutions that banks want - solutions that make the pie bigger for everyone but the channel partners.

    You prefer to do business with someone you know. The channel partners took a big cut but they slipped Mitek into all the financial institutions so now everyone knows Mitek

    One of MD's biggest contributions to the business model is this ability to go direct to the banks. That's my theory. "You've come a long way, baby!"

  • friendofthetrend friendofthetrend Jun 18, 2016 7:12 AM Flag

    Interesting thread.

    You have your leadership position via MD. It's brand recognition and reputation- a gold standard. You have an avenue to your market.

    You have your IP. You want to leverage the relationship with banks.

    You say, "let's create some value and a bigger piece of the pie for everyone". You introduce your other products. If the banks go along, everyone is happy. If they don't, Mitek really has no recourse but to raise the price on the products being used, namely Mobile Deposit.

    Just to go crazy raising the price on MD, however, would be to jeopardize the future. People are using MD more and more WHEN they HAVE checks to deposit BUT they have less and less checks to deposit. So MD is not the future UNLESS it is used to leverage existing relationships.

    This is bit abstract of away to look at it but they need to build upon a sustainable competitive advantage--going up on price with a dead end product might not be the way to do it.

    MD is NOT dead ended if it's used as a foot in the door. You ride the product NOT to its end but to a new beginning.

    People like to do business with someone they already know, so the scale is tipped to Mitek because of the weight of MD.

    This is why I have been saying the business model is to build on relationships established via MD and provide solutions that make the pie bigger for everyone including shareholders of MITK.

  • friendofthetrend by friendofthetrend Jun 17, 2016 11:12 AM Flag

    Interesting classified add and recent post on Iteris linkedin

    (DAILY NEWS) DBE Sub-Consultant Opportunity for Caltrans District 12 (D12) Integrated Corridor Management...
    Iteris is pursuing an opportunity for the State of California Department of Transportation (Caltrans) to provide consultation, research, professional and technical services required to design Integrated Corridor Management (ICM) for Orange County Triangle projects.

    ***
    The ICM project was budgeted for $4.5 B in 2014 so I just thought I'd post this.

  • Reply to

    Conference call

    by biotechisfun Jun 17, 2016 7:52 AM
    friendofthetrend friendofthetrend Jun 17, 2016 9:01 AM Flag

    Thanks. Good summary.10% of TAM (of $1.2B) is $120M. When a whole new market comes along and you are ready for it things can get to an inflection point and the future can change dramatically better. So holding and adding makes sense. Those who don't like the strategy or who don't like waiting can sell to stronger hands. I can forsee a long long period of growth ahead.

  • friendofthetrend by friendofthetrend Jun 17, 2016 7:28 AM Flag

    I don't want to get ahead of myself, but I hope we'll have some interesting things to comment on in the not too distant future. But there are other things like some of the significant crop protection deals that we think can really move the needle and we're working hard on this.

  • friendofthetrend friendofthetrend Jun 16, 2016 6:13 PM Flag

    The losses are planned in and priced in to the stock. If you like the strategy that means you accept the temporary losses as a component OF the long term strategy. They have lots of cash and a strong balance sheet.

    They beat on revs by over $.7M. They had a $.01 more loss. I like the stock, love the plan to build another business segment, so I'd love to add.

    In 4 more Qs there will not be any more losses and there will still be a lot of cash and a strong balance sheet with big positive cash flow and really nice EPS.

    If you like the plan then you can see the value creation. What good is EPS if you cannot grow it higher and create a more valuable company? What they are doing is fine with me. Building value.

  • There are over 100 Large Crop protection type enterprises. 15% say no after trials. 85% express interest. Some of that 85% commit to sales right away. Each one that commits produces avg. a $1M in annual sales at 70 to 80% margin.If they convert half that's $40M. Completely locked in, predictable, recurring, sticky revenues of the kind that would put ITI in another industry with higher multiples and metrics by which to determine price per share.

    But these types of customers represent only about a third of the addressable market. So the other 2/3s may bring the total way higher than $40M.

    So this is consistent with Abbas's remarks years ago in which he stated Ag would be a business segment on par with Transportation. So it seems to me to be progressing but due to it being a new market and a long sales cycle, there will be a pretty long lag in monetising what they seem to be accomplishing with these trials and deals.

    If you buy that they are progressing this is a triple in 2018 and beyond. A lot of questions on the call indicates a lot of interest in this comany.

  • Reply to

    Back to $1.70s (or lower) folks

    by barney67895 Jun 14, 2016 9:19 AM
    friendofthetrend friendofthetrend Jun 16, 2016 1:10 PM Flag

    What we have is a lag between the major Ag deals being announced and the slow but consistent ramp in quality repeat revenue as this scales. Right now, Ag revenue is barely moving the needle but I think the ramp could gather steam and go on for years and years. I can see this at $15 a share over time. It's a 2018 story.

DAEG
0.800.00(0.00%)Nov 20 3:44 PMEST