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JDS Uniphase Corporation Message Board

rspiland3 7 posts  |  Last Activity: May 13, 2014 5:21 PM Member since: Feb 23, 2012
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  • Everyone knows this has been a brutal market for small cap stocks with no earnings. But in the past week, I have two companies whose managements are putting their money where their mouth is. Today after the close, it was announced that MM CEO Michael Barrett bought $1 million in stock on the open market. Last week, it was announced that two directors of PKT bought stock in the open market. In light of MITK's generous non-cash compensation to executives and the recent collapse of the stock price, it would be nice to see management buy some cheap stock with their own money! Mr. DeBello, are you listening?

    Sentiment: Strong Buy

  • rspiland3 rspiland3 May 13, 2014 1:22 PM Flag

    Further illustrates that there is widespread awareness of MITK's technology not only among financial institutions but throughout the technology universe. Although I have invested in MITK for expected sales and earnings, there is also significant IP value.

    If MITK can't monetize its technology, there is a high probability that the company could be acquired imo. Any of MITK's larger channel partners could be likely buyers...FISV, NCR, JKHY, etc. I particularly like the potential fit with ACIW. But as GOOG's participation here, almost any software could consider it. Founder and Chairman John Thornton is in his 80s; have to wonder how patient he is with growing this business.

    Sentiment: Strong Buy

  • Reply to

    Blended average price per transaction

    by ekretiree01 May 12, 2014 12:04 PM
    rspiland3 rspiland3 May 12, 2014 3:19 PM Flag

    Third try replying to this...maybe it will post this time...
    This math just doesn't yield useful info. The 18.3 bil check total includes not only consumer checks, but commercial and not-for-profit checks as well. Yet DeBello stated that "10% of consumers nationwide have tried it." He does NOT say that 10% of consumers use it on a regular basis. And he does not address commercial transactions at all. Further BAC's CEO Moynihan has said 10% of deposits by consumers take place on the mobile channel; he says nothing of commercial transactions, which are a large percentage of total check transactions. There simply isn't enough information to derive transaction totals or pricing from aggregate data, but blindly applying 10% to total annual checks is clearly mixing apples with oranges. At any rate, MITK has stated that the sliding scale starts at 12 cents per transaction for 1 million transactions, so a blended total of 2 cents sounds pretty far-fetched.

    A better way is to assume BAC is around 1/3 of all mobile deposits and is running around 165k per day. This would suggest a run rate of around 180k industry transactions per year (165k x 3x 365), and would yield $3.16 mil quarterly revs at 7 cents per transaction. This is consistent with recent quarterly license revs, so I am quite comfortable with it.

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha

    by douglasstein72 May 7, 2014 5:36 PM
    rspiland3 rspiland3 May 12, 2014 2:06 PM Flag

    This math just doesn't add up. 18.3 bil checks includes commercial for-profit and non-profit checks. DeBello has said that only 10% of consumers have tried it. He does NOT say the 10% of consumers use MRDC regularly, and he does not address commercial transactions at all. Further, BAC's CEO Moynihan says that 10% of deposits by consumers take place on the mobile chanel; he does not address commercial deposits, which are a large percentage of the total.

    A better way to look at it is to assume BAC is around 1/3 of all mobile deposits and is currently running 165k per day. That would yield 180k total industry transactions per year (165k X 3 X365), and at 7 cents per transaction, it yields $3.16 mil in quarterly license revs. This is consistent with recent earnings reports, so I'm comfortable with it.

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha

    by douglasstein72 May 7, 2014 5:36 PM
    rspiland3 rspiland3 May 12, 2014 10:31 AM Flag

    Actually, MITK would be pretty close to breakeven if not for the litigation expense...not bad actually. But regarding revs, first, remember that MITK books rev when they sign a deal. Then there begins 6-9 months of systems integration before the bank can even use those transactions. Only once the service is live, and all the initial transactions used, will they reorder and generate more revs for MITK.

    Second, Canterbury is right; top 10 banks probably handle about 85-90% of all check deposits. They are all live, and presumably reordering fairly regularly. But as reorders become larger, the price goes down a sliding scale...TO A POINT. As transaction volumes grow, and price per transaction stops declining, this business model gives MITK huge leverage to the success of mobile deposit.

    I do NOT agree with Canterbury that new products "cannot draw flies." It's too soon to tell, but early indications are that banks are quite interested, and USBank loves them. Further, if new products succeed, pricing is much more favorable to MITK. But importantly, new product revs are not included in any of the analysts' expectations (including mine.) Hope that helps!

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha

    by douglasstein72 May 7, 2014 5:36 PM
    rspiland3 rspiland3 May 11, 2014 11:48 AM Flag

    8 cents per transaction is an estimate. We would all like more transparency on pricing, especially since management used to provide an average per-transaction price. But we do know certain elements of the Mobile Deposit pricing model.

    The basic structure is a sliding scale starting at 12 cents per transaction for 1 million transactions over a fixed term. Price drops for more transactions; we don't know how low the per-trans price goes or how many transactions it takes to get there. Maintenance & Professional Services revenues reflect 18% of value of each contract, pro rated over the term of the contracts.

    Although this model leads to high variability in revs short term, over time it provides a lot of leverage to the success of the product. Over time, transaction growth and revenue growth will converge as price per transaction stops declining. I think 6-8 cents is a pretty good estimate of blended average price per transaction. So at 2.2 billion transactions and a 22% Net Margin, eps would be between $1.10 and $1.46. Importantly, these numbers reflect only Mobile Deposit and include zero contribution from other products or the developers forum. Hope that helps!

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha

    by douglasstein72 May 7, 2014 5:36 PM
    rspiland3 rspiland3 May 7, 2014 6:21 PM Flag

    I think this is a good article! Look, independent forecasters project between 1.6 and 2.4 billion MRDC transactions per year in 2016. Janney is using 2.2 billion. At 8 cents per transaction, that's $176 million in license revs alone. Add in maintenance & Professional Services, then revs should be north of $200 million. At a 22% net margin (which is middle-of-the-pack for software companies,) eps would be $1.46.

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