Fundamentals and Business Related Activities

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  • #7955
    odysee
    Registered Boarder

    Saul, is there any indication or feedback on when the consolidation exercise is likely to be completed? If my memory serves me correctly, the January conference call suggested a conclusion of the consolidation ( plus a holding company being in place )and LOC after due diligence by May/June 2020.
    Given some delays on account of COVID-19, are we close, very close or almost done?
    Or does the overhang of Axix bank keep the proverbial spanner in the works till settled? The last conference call confidently suggested ( pardon the grammar), that 95% of the exercise had been completed, and things would be wrapped up ‘very soon’. I was hoping that the June quarter results whenever announced would give the consolidated results of the 12 subsidiaries. Or do I hope in vain. It’s frustrating to see BCG not getting the recognition it deserves from market participants.

    4+
    #7956
    Logan
    Registered Boarder

    @odysee, I have the same information that you have. I don’t want to guess or speculate when they may get the LOC.

    I want them to get it before the campaigns for the US presidential election starts. The election date is November 3rd so the campain may start from September end or early October.

    I think this time the spending on ads will be more because of the pandemic, many people will not attend the rallies.

    Signing reputed publishers this year was a smart move, since social media is getting a lot of negative press these days, the traffic will be more in these publishers website.

    #7957
    odysee
    Registered Boarder

    Apologies. Meant Axis bank , typed Axix.

    0
    #7989
    admin
    Keymaster
    Topic Author

    source: https://www.adweek.com/programmatic/ad-tech-unexpected-stock-price-jump-explained/amp/

    #7991
    admin
    Keymaster
    Topic Author

    2+
    #7992
    admin
    Keymaster
    Topic Author

    Official disclosure : http://brightcomgroup.com/wp-content/uploads/2020/08/Brightcom-Ownership-Document.pdf

    7+
    #8016
    admin
    Keymaster
    Topic Author

    Sub: Update on the loan account with Axis Bank (BSE Update: 13 Aug 2020)

    This update is to inform you that after due consultation with the officials at Axis Bank, the company has sent a formal request letter to the bank. The letter elaborated a proposed payment plan in regards to the closure of BCG’s loan account with them. We await an official response from the bank.

    #8028
    Logan
    Registered Boarder

    Smart move by the CEO to go to analysts who know and understand the business well.

    No disrespect to Indian analysts but they don’t understand the business well enough. They don’t know the strengths of BCG, they only see price and then decide whether to cover or not but that is not the case with foreign analysts.

    Online advertisements are very important and because of ads we are getting all the information for cheap. In one of the presentations BCG had mentioned that

    “Adtech is what makes of the internet tick. Ads are the lifeblood of the internet, the source of funding for just about everything you read, watch and hear online. We put the tech in Adtech”

    Any sane investor/analyst should know the importance but unfortunately in our country they don’t.

    Because of COVID-19, even small businesses like local bars, small shops etc (at least in the US) are going digital and they will spend on online advertising to get more customers.

    Now is a good time for the company to approach analysts, all the outstanding issues are getting resolved. In the past because of daum and NPA label (India debt) the company may have hesitated to approach them.

    If more analysts cover the stock then it will be easier to get access to additional funds also. Getting additional funds is very important for growth and of course that will lead to more recognition. I’m hoping Mr.Reddy and his team will take right steps.

    #8046
    Logan
    Registered Boarder

    The Trade Desk

    (2016)

    Revenue – $202M
    Pat/Loss- $(26)M
    Current Liabilities- $344M
    Non current Lia- $29M
    Total Liabilities- $373M
    Receivables- $377M
    Payables- $321M
    Cash- $133M

    2019

    Revenue – $661M
    Pat/Loss- $108M
    Current Lia-$930M
    Non current Lia-$186M
    Total Lia-$1116M ($1.11B)
    Receivables-$1166M($1.16B)
    Payables – $868M
    Cash -$130M

    Current liabilities increased 2.7 times, non current liabilities increased 6.4 times, receivables increased 3.1 times, payables increased 2.7 times and total liabilities increased 3 times.

    1+
    #8047
    Logan
    Registered Boarder

    Brightcom Group

    2016

    Revenue- $345M
    Pat – $61M
    Current lia – $45M
    Non Current lia- $28M
    Total Lia – $74M
    Receivables- $110M
    Payables – $13.5M
    Cash- $1M

    2019

    Revenue- $368M
    Pat – $63M
    Current lia – $38M
    Non current lia – $28M
    Total lia- $66M
    Receivables – $128M
    Payables – $12.3M
    Cash- $14.9M

    Current liabilities, payables have decreased, receivables have increased slightly and cash has increased significantly (but that’s not enough increase to have a significant impact).

    0
    #8048
    Logan
    Registered Boarder

    The Trade Desk

    Debt/Equity – 1.8
    Return on equity – 17.68%
    Operating margins- 17%
    Net profit margin – 16.38%
    Current ratio- 1.55

    Brightcom Group

    Debt/Equity – 0.15
    Return on equity – 14.53%
    Operating margins – 29.4%
    Net profit margin – 17%
    Current ratio – 8.36

    BCG has less debt and more current assets so there’s no worry about operations. BCG can survive easily if something bad happens suddenly.

    1+
    #8049
    Logan
    Registered Boarder

    The Trade Desk’s growth is high because it took on more debt and used that debt well. But it’s receivables and payables are more than it’s revenue whereas BCG’s receivables are 1/3rd of the revenue and payables are negligible.

    BCG didn’t take additional debt and the price it paid was stagnant growth.

    The company has improved it’s efficiency and that in turn will help to get the loans (LOC) easily. If BCG took on more debt it could’ve grown more but the management focused more on resolving outstading issues first.

    They did try to raise fund in 2017 from White Oak but because DAUM subpoenaed White Oak that deal didn’t happen.

    6+
    #8051
    Logan
    Registered Boarder

    Many smaller adtech companies like telaria, yume etc couldn’t keep the business well so they were sold to other companies for cheap and few others went bankrupt.

    BCG is fundamentally stronger and well prepared for the future. Loc will help the company significantly. Market is not understading BCG’s strengths and it is waiting for the company to resolve outstanding issues first.

    7+
    #8088
    aindia
    Registered Boarder

    BCG: Rapid Fire @ 20_AUG_20

    History of Consistently Increasing Sales, Earnings & Cash Flow: Yes.
    Competitive Advantage: Ahead of the curve and sustainable (ISRAEL CONNECT)
    Future Growth Drivers: A Ton of them (some already playing out)
    Conservative Debt: YES (soon to become Debt- Free)
    Debt Equity Ratio: Near ZERO
    Current Ratio: 4.42
    Return on Equity: Above Average@15.7%
    Low CAPEX required to maintain current operations: No (AdTech players have to keep on burning Capex to stay in the hunt)
    Management is holding / buying the stock: Flat so far 39 %.( Grapevine has it that some reporting on creeping acquisition on the cards)
    Price is Under Valued: Yes- grossly for about 3 yrs
    Stock Price is consolidating: Yes- painfully for about 3 yrs
    Stock Price is growing in past years along with EPS growth: Regretfully a big NO

    OTHER CONSOLIDATED Parameters / Metrics:
    Consolidated PE Ratio: 0.85
    Consolidated PB Ratio: 0.13
    Cash Flow: Positive and to shift gears for the better
    Net Profit %: healthy @ 16.34%
    Dividends: paltry and grossly irregular. Tide change, for the better, is to be expected
    Tax: No-Stand Alone PBT has been negative so far. Tide change marginally felt recently. All the overseas subs are shown to be regularly paying taxes basis tax laws of the countries.
    EPS Growth Rate: Healthy in absolute terms, but flat. Tide change, for the better, is to be expected
    Jump in Trailing Result EPS: No. Flat Q4 YoY@ Rs.2.26
    Jump in Quarterly EPS: No -because it follows the seasonally best Dec Qtr.
    Expected Gain in 5 Years: 20 times (CMP@7.5) over FY ‘21- FY ’26
    Mkt Price: 13.02 / 2.46 being 52 Wk High & Low
    Trading Volume: High, expected to turn Low to Moderate (following the past PEs exit)
    Brand Power: No at the present but it could turn to Yes hereafter.
    Corporate Governance, Reputation of Leaders: Market perception is Poor so far. It can only improve
    Fraud reported: No.
    Annual Report: One of the Very Best Hard copies in India
    Expansion Plans: It’s an ongoing process, to stay competitive.

    #8092
    aindia
    Registered Boarder

    FY 2020(AR due before AGM)

    A.Commentary on Audited Consolidated Balance Sheet Items

    1.YoY -LT Borrowings unchanged @ zero
    2.YoY-other LT liabilities unchanged @ zero
    3.YoY, Loans-Current (Short Term Loans and Advances) from Rs.683 cr.to Rs.652 cr)………..POSITIVE
    4 YoY-ST Borrowings down by 46 % (from Rs.67 cr to Rs.36 cr) and after March’20, should be trending to “zero”……POSITIVE
    5.YoY-Other Current Liabilities up 7.7% from Rs.220 cr to Rs.236.7cr…………………….. NEUTRAL.
    6.YoY-LT Loans n advances down 39% from Rs.165 cr to Rs. 100 cr by …..POSITIVE
    7.YoY-Trade Receivables up 9.6 % from Rs.890 cr to Rs.975 cr…………….NEUTRAL
    8.YoY-Non-Current Investments up 11.3 % from Rs.225.5 to Rs.251 cr…………..POSITIVE
    9.YoY-Trade Payables up 20 % from Rs.84.4 cr to Rs.101.5 c r…………….NEUTRAL to POSITIVE.
    10.YoY-(Non-Current) Tangible Assets up, big time, by nearly 37 times from Rs.24.5 cr to Rs.963 cr…………..BIG POSITIVE
    11.YoY-(Non-Current)“Intangible Assets” significantly down from Rs.500 cr to NIL………….. To probe further
    12.YoY-(Non-Current)“Capital Work in Progress ” significantly down from Rs.148 cr to NIL………….. To probe further.
    13.YoY- Cash and cash equivalents grew 16 % from Rs.102.6 cr to Rs.119 cr…………………… POSITIVE
    14.YoY-other CURRENT ASSETS dropped by a big 71% from Rs.541 cr to Rs.158 cr………………. To probe further.
    15. Contingent Liabilities down from Rs 115 cr to NIL…. To probe into.
    ——————————————————————————
    B. P&L -TRENDS

    1.YoY-Total Cost of Revenue up 4.8% from Rs.1969 cr to Rs. 2064 cr whereas, Total Revenue was up 4.97% from Rs. 2578 cr to Rs.2706 cr. …………… POSITIVE
    2.YoY-Direct Cost of Revenue up 4.1% from Rs.1649 cr to Rs.1717 cr whereas Total Revenue was up 4.97% from Rs. 2578cr to Rs.2706 cr. …………… POSITIVE
    3.YoY-Finance/ Interest Cost down from Rs.13.18 cr to Rs.6.3 cr (on way to “ debt-free” status) …….POSITIVE
    4.Employee Benefit Exp. up marginally from Rs.158.5 cr to Rs.160.9 cr. Relative to Total Revenue it is down from 8% to 7.8% …………… POSITIVE
    5.Abs.EBIT, YoY, marginally up from Rs.621.7cr to Rs.623.4 cr.
    6.PBT, YoY, up from Rs.617 cr to Rs.608 cr by 1.5%……….. ………….NEUTRAL
    7.Depreciation /Amortization exp up by 33% from Rs.135 cr to Rs.180 cr……….Sounds PRUDENT.
    8.YoY-PAT is down, marginally, from Rs.444 cr to Rs.440 cr Now in the zone of stabilization……………Neutral to POSITIVE
    9.YoY,the EPS is flat @ Rs.9. EPS growth, expected to pick up……………NEUTRAL/POSITIVE.

    3+
    #8140
    aindia
    Registered Boarder

    Not so obvious game changing trends@BC:

    I would urge you all to shift Focus on to the adauth.com stats of Brightcom, that were tearing away during August 2020.

    Very early on(2015) , you may recall, management was harping on building DIRECT SELLERS relationships, for the reason that they yield huge margins.

    Source: Screen shots of 17 Sep’19, 23 Apr’20 and 29 th Aug’20 ( could not paste here)

    link to track in future:
    https://www.adauth.com/exchanges/brightcom.com

    Like I said, we should now be tracking :

    The mkt share was at 1.8 % (17 Sep’19) an year ago,and now spiked up to 3.3% during this month(Today).
    ——————————————————————
    Growth in Count of DIRECT ACCOUNTS grew (thrice) from:

    17474 on 17Sep’19
    to
    31274 on 23 April’20
    to
    57174 on 29th August’20( Today)

    The above is what separates men from the boys.YoY the growth is an enviable 230%
    ——————————————————————
    Ratio of Direct vs Reseller a/cs- Ratio changed from

    73:27 on 17Sep2019
    to
    78:22 (23 April’20)
    to
    84:16(28th August’20)

    Ratio is changing for the better
    ——————————————————————
    Growth in PUBLISHERS Count grew by approximately 95% from year ago,as thus:

    17524 on 17 Sep’19
    to
    21762 on 23 April’20
    to
    34223 on 29th August’20 (Today)

    Trend is significantly positive.
    ——————————————————————

    Growth in Count of TOTAL ACCOUNTS
    is over 200 % from yearago count:

    22572 on 17 Sep’19
    to
    40329 on 23 April’20
    to
    67765 on 29th August’20 (Today)

    Above metrics indicates a fantastic all round upward trend.
    ——————————–

    #8142
    jmathew
    Registered Boarder

    Last year August BCG was trading around Rs 3 to 3.5 range with lots of uncertainties. There was no clarify on OAK, Loan to Indian Banks, Pledge shares, Daum settlement and Subsidiaries.
    Now we know that
    1. OAK exited. (let us wait for official confirmation from the MGT)
    2. Loans to Indian Banks (we know that only Axis is pending now and it will be closed soon). I believe Axis is a done deal.
    3. Pledge shares are reduced from 59 percentage (in Sep 2019) to 33 or less as per June 30, 2020 SHP and more will be released once Axis is closed.
    4. Daum closure (last stage as per the company’s discloser to the exchange). I believe it is a done deal.
    5. US subsidiaries consolidation is done with the help BDO world’s 6th largest auditing firm.
    6. Israeli subsidiary is fully audited by E & Y (around 38 percentage of the total income)
    7. LOC is approved and due diligence process is underway as per the last con call. Once LOC is available 20 to 30 % more growth is expected.
    8. New investors please go though the last CC. https://finance.yahoo.com/news/edited-transcript-lycos-nse-earnings-211340403.html
    9. BCG is trading @ pe 1, where the average industry pe is 23
    10. Book value is 55 plus.
    11. Total income is around 2800 cr and profit is around 400cr
    12. BCG is highly highly undervalued (as per my view)
    13. Please do your research before buying or selling BCG.

    #8143
    aindia
    Registered Boarder

    Not so obvious game changing trends@BC:

    I would urge you all to shift Focus on to the adauth.com stats of Brightcom, that were tearing away during August 2020.

    Very early on(2015) , you may recall, management was harping on building DIRECT SELLERS relationships,for the reason that they yield huge margins.

    Could not Paste screen shots of:
    17 Sep’19, 23 Apr’20 and 29 th Aug’20

    link to track in future:
    https://www.adauth.com/exchanges/brightcom.com

    Like I said, we should now be tracking :

    The mkt share was at 1.8 % (17 Sep’19) an year ago,and now spiked up to 3.3% during this month(Today).
    —————————————————————
    Growth in Count of DIRECT ACCOUNTS grew (thrice) from:

    17474 on 17Sep’19
    to
    31274 on 23 April’20
    to
    57174 on 29th August’20( Today)

    The above is what separates men from the boys.YoY the growth is an enviable 230%

    ————————————————————-
    Ratio of Direct vs Reseller a/cs- Ratio changed from

    73:27 on 17Sep2019
    to
    78:22 (23 April’20)
    to
    84:16(28th August’20)

    Ratio is changing for the better
    ——————————————————————–
    Growth in PUBLISHERS Count grew by approximately 95% from year ago, as thus:

    17524 on 17 Sep’19
    to
    21762 on 23 April’20
    to
    34223 on 29th August’20 (Today)

    Trend is significantly positive.
    ——————————————————————–
    Growth in Count of TOTAL ACCOUNTS
    is over 200 % from year ago count.

    22572 on 17 Sep’19
    to
    40329 on 23 April’20
    to
    67765 on 29th August’20 (Today)

    Above metrics indicates a fantastic all round upward trend.
    ———————————

    #8145
    sateanna
    Registered Boarder

    @aindia good analysis, all figures point upwards..lets see how this translates to top & bottom lines.

    #8146
    Logan
    Registered Boarder

    1>

    Online Advertising industry is a very big industry and also very complex. Just because BCG and Affle are in online/digital advertising, it doesn’t have to mean both their businesses are same. In Online/Digital marketing industry, each and every company won’t do the same business. Before comparing we should look at facts.

    Transportation is the best example, there are different modes of transportation, roadways, airways, seaways, railways etc. but no one compares a road transport company with an airways company or a rail company. Online Advertising is also the same.

    Though both BCG and Affle are in Online Advertising, they both have different business models. BCG is an SSP (Supply Side Platform) and Affle is a DMP (Data Management Platform) and The Trade Desk is a DSP (Demand Side Platform). BCG sometimes is a DSP but it concentrates more on the supply side (publishers).

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