Should Mitek Systems Acquire Top Image Systems? [View article]
I would reference the segment between 19:21 and 19:51 "We sell term licenses that are based on the number of defined transactions...typically 1, 3, or 5-year terms, and after they expire you either reorder, or hopefully you have reordered sooner because you've used up all those clicks". Further the Janney Initiation report dated Aug 1, 2011, page 4 references "3-5 year deals with resellers" (which is the source of most of their business).
The 12-24 month lead on the competition is expressed as an opinion not a fact, since such a fact would be literally impossible to verify either way.
Buyers and sellers make a market, bro. But I have done my homework on MITK, and I would keep a pretty tight stop on that short. Check out OCZ.
Should Mitek Systems Acquire Top Image Systems? [View article]
By the way Jeat, if what you like is very cheap stocks with white-hot growth, you should check out my articles on SSD company OCZ. Just turned profitable, trades at less than 1X sales. Hasn't run yet, but I think should be a triple over the next year or so...now my largest position. Good luck!
Should Mitek Systems Acquire Top Image Systems? [View article]
Gonna be less overpriced tomorrow...announced an 8 mil share offering after the close. 2.2 mil new shares and 5.8 mil to cash out the VCs. Good company though... I still have a stub position left; maybe a buyer on the deal if it trades off enough.
Should Mitek Systems Acquire Top Image Systems? [View article]
3- 5 year contracts was discussed by the CEO at the Merriman conference Feb 1, 2012, and it can be accessed on their website. It was also discussed in some of the street research I get. Regarding F2012 PE, my estimates are higher than street consensus, and I think calendar numbers provide more useful comparisons.
I think what you call flip-flopping, I call stating the obvious. The stock has had a nice run, and it could pull back in a correction. Development-stage companies always look expensive on current numbers. So we adjust for that by modeling future expectations, which can be a VERY subjective process. But my analysis suggests it will be much higher over the next year or two. If you think otherwise, you should short it!
Should Mitek Systems Acquire Top Image Systems? [View article]
Not sure why folks think MITK is so expensive, but valuation is always tricky when a company is just starting to show a profit. They have most major banks under contract, and are continuing to sign more. They have great relationships with channel partners like FISV, JKHY, etc. And they have a well-established, patented suite of services, as well as new products yet to be launched. The product positioning, 3rd party relationships and bluechip customer base will take at least a year or two for any competitor to replicate, and I'm guessing user trials and system integration alone could take as much as a year.
Rev growth is forecast at 100% in F2012, and 100% again in F2013. Eps in F2012 and F2013 is forecast to be 12 cents and 40 cents respectively. So calendar 2013 should be at least 50 cents...which translates to 24X C2013 eps for 100% growth. Don't forget, this business has huge gross margins, so a little sales growth goes a long way. And these estimates are likely conservative.
By comparison, TNGO (different SaaS business, but comparable competitive position) trades at 32X C2013 numbers, and rev growth is only forecast to be 17%. FTNT trades at 44X C2013 estimates and is projected to grow revs 18%, and it has a lot of competition. Against that backdrop, I think MITK is worth 35-40X C2013 estimates or $18-20. Hope that helps.
Should Mitek Systems Acquire Top Image Systems? [View article]
Bot a little TISA because valuation is cheap and growth looks good. But still happy to hold MITK. MITK has most of the top U.S. banks already under contract, and filing a patent does not make TISA a viable RDC competitor imo. End-user demand is very strong, so MITK earnings growth should be good.
Both MITK and TISA are presenting at Roth Growth Conference Wed, Mar 14, so looking forward to seeing them.
Should Mitek Systems Acquire Top Image Systems? [View article]
Interesting comment. Do you know much about TISA's technology? MITK's mobile banking technology is far ahead of the competition. I do not think it would make strategic sense for MITK to get into these other businesses, but the international footprint could have some appeal.
Both companies will be speaking at the Roth Growth Stock Conference Wednesday, March 14.
Dendreon's Provenge: Interview With Head, Large Urology Group Practice [View article]
Hi Ted, thanks for all your work on DNDN. As I am not a scientist, I have tended to stay away from development-stage biotech for the simple reason that others have far more insight into handicapping companies' prospects than I do. Add to that the perception that the FDA is a "rigged game", and the risk reward profile (for me) is usually unfavorable. As a punt, I have usually invested only in companies controlled by R.J. Kirk, who I know has a great record of developing and selling novel technologies (ex-CLDA; now HALO and ZIOP.)
But I do like cheap stocks with good prospects, and so bought some DNDN and HGSI late in 2011. Your articles have been a primary source of information on DNDN. So please keep up the great work. Do you have an opinion on KERX ahead of the unblinding of perifosine trials?
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
Valuation is high on current earnings; much lower on future expectations. The stock has had a nice run since last quarters earnings. I like the company, and I am content to hold for future growth. If you want to wait for a pullback, you will probably get a chance...small cap stocks can indeed be volatile. But I have no problem with Blair's offering or the Schwab datapoint. I like MITK's prospects, and I like the lower tax rate of going long-term.
My only criticism of this article is that the author doesn't know what he's talking about. And he doesn't.
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
I hear you on the short term risk. But no, checks aren't going away anytime soon. Checks have been "going away" for at least a decade, but there are still 26 billion checks each year. I don't even use a smartphone, but yes I know people who use the mobile deposit app and love it. The Schwab datapoint I mentioned is the most telling info...end-users really like this.
But you have to remember this company is still R&D-ing. Mobile Bill Pay and the Insurance business are only 2 nascent services. I think they can use their intelligent imaging platform to create a virtual safe deposit box of stored information at a much higher price per transaction.
In my opinion, the stock was grossly undervalued at year end (when I wrote it up for SA) and is more fairly valued now. But it's growing super-fast, so will be fairly valued at a higher price over the next year or so.
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
I have used several brokerage firms' research, listened to online management presentations, read 10Qs, 10ks, etc., and corresponded directly with the company while conducting my due diligence. I think the "3-5 year contracts" may have been mentioned at the Merriman conference, but has definitely been talked about by wall street. William Blair was quoted in the press a few months ago as saying MITK had a 12-24 month lead over the competition. You can also get pretty good competitive information from http://bit.ly/xmo5tc.
I am not concerned about competition right now, but I am mindful that the valuation is high and visibility on banks' launch schedules is not that great. Fortunately, management provides no guidance and says only that revenues will be "lumpy" for the next few quarters. I have a longer term horizon...2-3 years...and my target is probably low to mid $20s over that time period. But I would acknowlege it could correct after this recent run.
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
This article on MITK is among the most inane posts I have ever read on SA. And that's saying something! Although the stock has risen in the past month, I am targeting $18-20 within the next 12 months.
Do you even know what MITK does? Their imaging software enables a user to deposit a check or pay a bill by taking a picture of it with a smartphone. INTU and EMC are not even remotely considered comps for this company. And there is no competitor within 2 years of duplicating their technology.
MITK has signed 8 of the top 10 banks and a total of 250 financial institutions to contracts ranging from 3 to 5 years for their flagship Mobile Deposit. Last quarter, contracts were up 55% from the previous quarter. Their terms provide a licensing fee and around 10 cents per check. The reason revs are just starting to ramp is because these institutions are only beginning to launch the service. But last fall Schwab told investors that mobile deposit had gone from zero to 40% of all check deposits in only six months since it was launched. That is a staggering number, which highlights end-user demand.
Since MITK has only recently become profitable, there is no surprise that it has a high PE, but revenues are expected to at least double this year and then double again next year. Moreover, since SaaS companies have astronomical returns on invested capital, they typically command much higher valuations than hardware-centric business models like EMC.
Finally, if you perform a little due diligence, you will find MITK has no debt. That 8.51 figure you pulled off of Yahoo is the Current Ratio, not Debt/Equity.
Thanks for responding! Yes I've written several articles on OCZ (no pay) which provide a decent start. I think street estimates are way too low. Management is underrated, but very good. Good luck!
Probably not a bad call on UA and RL if only you're only 10% short and using put spreads. But LULU is still a long in my opinion. I've been long LULU since early 2009 and still own some. On balance, attempts to hedge or market-time the position have lost money. The reason it's expensive is that the fundamentals are great...great management, highest ROIC in retail, highest sales per sq. foot in retail, and fastest growth rate. Important to note that it's not just yoga clothes, but a broad range of apparel for an active lifestyle...still an underserved market at the high end.
To value LULU, start with 20% sq. footage growth, add high single digit comps (although currently comps are in the 20s), and a little operating leverage and you have 30% eps growth for another 3-4 years. Add at least one trial concept (Ivivva...going well) and potential for greater international expansion (CEO Christine Day was former head of SBUX International) and you have growth well over 30% for a long time!
To be sure, I'm not an aggressive buyer after the stock has spiked. But my experience has been that I can make the big money not by hyper trading, but by recognizing a huge long-term winner and just sitting tight. And LULU falls in that category. Fyi, what I'm buying now is OCZ, which I think can become a similar long-term moonshot...very cheap (on sales; only recently turned profitable) and gaining share in a fast-growing market.
Should Mitek Systems Acquire Top Image Systems? [View article]
The 12-24 month lead on the competition is expressed as an opinion not a fact, since such a fact would be literally impossible to verify either way.
Buyers and sellers make a market, bro. But I have done my homework on MITK, and I would keep a pretty tight stop on that short. Check out OCZ.
Should Mitek Systems Acquire Top Image Systems? [View article]
Should Mitek Systems Acquire Top Image Systems? [View article]
Should Mitek Systems Acquire Top Image Systems? [View article]
I think what you call flip-flopping, I call stating the obvious. The stock has had a nice run, and it could pull back in a correction. Development-stage companies always look expensive on current numbers. So we adjust for that by modeling future expectations, which can be a VERY subjective process. But my analysis suggests it will be much higher over the next year or two. If you think otherwise, you should short it!
Should Mitek Systems Acquire Top Image Systems? [View article]
Rev growth is forecast at 100% in F2012, and 100% again in F2013. Eps in F2012 and F2013 is forecast to be 12 cents and 40 cents respectively. So calendar 2013 should be at least 50 cents...which translates to 24X C2013 eps for 100% growth. Don't forget, this business has huge gross margins, so a little sales growth goes a long way. And these estimates are likely conservative.
By comparison, TNGO (different SaaS business, but comparable competitive position) trades at 32X C2013 numbers, and rev growth is only forecast to be 17%. FTNT trades at 44X C2013 estimates and is projected to grow revs 18%, and it has a lot of competition. Against that backdrop, I think MITK is worth 35-40X C2013 estimates or $18-20. Hope that helps.
Should Mitek Systems Acquire Top Image Systems? [View article]
Both MITK and TISA are presenting at Roth Growth Conference Wed, Mar 14, so looking forward to seeing them.
Should Mitek Systems Acquire Top Image Systems? [View article]
Both companies will be speaking at the Roth Growth Stock Conference Wednesday, March 14.
Dendreon's Provenge: Interview With Head, Large Urology Group Practice [View article]
But I do like cheap stocks with good prospects, and so bought some DNDN and HGSI late in 2011. Your articles have been a primary source of information on DNDN. So please keep up the great work. Do you have an opinion on KERX ahead of the unblinding of perifosine trials?
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
My only criticism of this article is that the author doesn't know what he's talking about. And he doesn't.
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
But you have to remember this company is still R&D-ing. Mobile Bill Pay and the Insurance business are only 2 nascent services. I think they can use their intelligent imaging platform to create a virtual safe deposit box of stored information at a much higher price per transaction.
In my opinion, the stock was grossly undervalued at year end (when I wrote it up for SA) and is more fairly valued now. But it's growing super-fast, so will be fairly valued at a higher price over the next year or so.
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
I am not concerned about competition right now, but I am mindful that the valuation is high and visibility on banks' launch schedules is not that great. Fortunately, management provides no guidance and says only that revenues will be "lumpy" for the next few quarters. I have a longer term horizon...2-3 years...and my target is probably low to mid $20s over that time period. But I would acknowlege it could correct after this recent run.
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
3 Micro-Cap Software Stocks To Consider, 2 To Avoid [View article]
Do you even know what MITK does? Their imaging software enables a user to deposit a check or pay a bill by taking a picture of it with a smartphone. INTU and EMC are not even remotely considered comps for this company. And there is no competitor within 2 years of duplicating their technology.
MITK has signed 8 of the top 10 banks and a total of 250 financial institutions to contracts ranging from 3 to 5 years for their flagship Mobile Deposit. Last quarter, contracts were up 55% from the previous quarter. Their terms provide a licensing fee and around 10 cents per check. The reason revs are just starting to ramp is because these institutions are only beginning to launch the service. But last fall Schwab told investors that mobile deposit had gone from zero to 40% of all check deposits in only six months since it was launched. That is a staggering number, which highlights end-user demand.
Since MITK has only recently become profitable, there is no surprise that it has a high PE, but revenues are expected to at least double this year and then double again next year. Moreover, since SaaS companies have astronomical returns on invested capital, they typically command much higher valuations than hardware-centric business models like EMC.
Finally, if you perform a little due diligence, you will find MITK has no debt. That 8.51 figure you pulled off of Yahoo is the Current Ratio, not Debt/Equity.
3 Well-Loved Retailers I'm Shorting [View article]
3 Well-Loved Retailers I'm Shorting [View article]
To value LULU, start with 20% sq. footage growth, add high single digit comps (although currently comps are in the 20s), and a little operating leverage and you have 30% eps growth for another 3-4 years. Add at least one trial concept (Ivivva...going well) and potential for greater international expansion (CEO Christine Day was former head of SBUX International) and you have growth well over 30% for a long time!
To be sure, I'm not an aggressive buyer after the stock has spiked. But my experience has been that I can make the big money not by hyper trading, but by recognizing a huge long-term winner and just sitting tight. And LULU falls in that category. Fyi, what I'm buying now is OCZ, which I think can become a similar long-term moonshot...very cheap (on sales; only recently turned profitable) and gaining share in a fast-growing market.