Investment Q&A

Q: My small cap portfolio currently consists of Macro Enterprise, Sangoma Technologies, and Gran Columbia Gold. I’m looking for 1-2 more niche small cap names to add to that list. Are there a couple others that interest you right now? Thanks.

Q: At bare minimum should Sangoma's stock price trade at least 1X sales based on the current sales quarterly run rate of $30M or $120M annually (which is a mix of recurring) just reported therefore a stock price closer to $2.30? The Company continues to exceed on revenue growth, EBITDA and cash flow expectations and trailing net income has little meaning for a company making big acquisitions because of one-time integration costs . From management comments the Company's outlook is very strong and they continue to execute on paying down debt. Other Company's trade at more then 3 times future sales with no track record! I am missing something?

Q: HI there, can I please get your take on Sangoma's Q results? Thank you!

Q: Hi 5i Team,
I really appreciate the service
I'm looking to add to positions in the above companies this year. In what order would you recommend I fill out these positions?

Thanks

Q: Recently both Acumen Capital and Cormark Securities elevated their coverage on Sangoma Technologies to a Top Pick (Small Cap) for 2019. Do you agree with their positive basis for this stock?

Q: STC has held up very well in this tech massacre. When I sold out of RHT I put that money into this company. It has just announced its latest quarter. Opinions please?

Q: What is your opinion of Sangoma's Fiscal 2018 results? Q4 looked really good with very strong EBITDA margins coming in much higher than expectations. Do you think the stock can move up from current trading levels?

Q: I noticed 5i has dropped Reliq a growth stock from your portfolio. Would STC, QST, ITC & CWL be good growth stock replacements given their current value?

Q: Hi
Sangoma recently announced the purchase of Digium for US28,000,000. Once the transaction is signed, Sangoma intends to finance the deal by borrowing approximately $21 million. The new credit facility will be drawn in US dollars, and will be repaid over 7 years and is expected to have an interest rate of 6.0% to 6.5% per annum at closing. What do you think will be the monthly or annual payments? Will the payments represent only interest costs or will they include a portion of capital?
On page 8 of the investor presentation, it is written that Digium has about $15,000,000 in tax NOLs. Is it fair to assume that Digium has lost $15,000,000 over several years and that Sangoma will be able to use the tax NOLs in order to avoid paying taxes on future US earnings?
Is the Nols considered an asset? Will it show up in Sangoma's balance sheet?
If Digium did not have $15,000,000 in tax NOLs, what would have been a fair transaction price?
What is the approximate value of $15,000,000 in tax NOLs?
What is the approximate percentage of the purchase price attributable to the $15,000,000 in tax NOLs?
Thank you and have a nice day.

Q: My first reaction to the big deal announced this morning was to sell all my shares. I don’t understand buying a company for so much that is ebitda breakeven. I realize the recurring revenue is good and maybe this gives them cross selling opportunities but will this deal not result in diluted eps and ebitda/share? What’s your take on he deal? Thanks

Q: Sangoma announced a major deal this morning. On the investor call, Management gave out fiscal 2020 EBITDA margin forecast of 13% based on at least $100M sales for the combined companies. (Of note Sangoma has a habit of beating its forward guidance.) What EBITDA multiple should STC trade at now?

Q: I have complied a list of what I believe are all high quality microcap stocks with current market valuations that are still very attractive and have good upside potential over the next 12 months. How does 5i ranks these stocks and am I missing some obvious microcap stocks with similar traits?

Q: Sangoma released preliminary numbers for fiscal 2018 which tops guidance. Based on management's comments on the current EBITDA quarterly run rate, the the current stock price seems deeply undervalued based on EV/EBITDA with net cash on hand metric, revenue multiple and M&A history. Do you agree?

Q: These three securities listed above have all come off in a short period of time by 10% or more - do you know if there is a problem with any of them? Thanks Dennis

Q: With 3 analysts covering Sangoma now (Cormark, Beacon & Acumen), the Company seems to have all the good qualities for a small cap investment. Is it a worthy stock for the 5i growth portfolio based on its still attraction valuation?

Q: Good morning guy:

Could you please provide your opinion on this name please. Is it a buy for a long term hold?
Thanks
Mark

Q: What did you think of their recent quarterly results? I thought earnings looked good after taking out the one time acquisition costs. What are you thoughts?

Q: My small cap holdings consist of:
Biosyent (RX), Versa Bank (VB), Sangoma (STC), and Dynacor Gold (DNG)
If you were going to add to one of these which would it be and why?
Would you sell any of these today?
Thanks.

Q: any idea what is going on with this company? big volume yesterday and price weakness?
thanks
Don

Q: Hi 5i:
Do you think its wise to build a bigger position in Sangoma Technologies now (as part of a growth portfolio) given that the Company has cashed up following the closing of a bought deal financing with institutional investors? The Company has a history of making profitable acquisitions.