Data Communications Mgmt. Turns the corner Again
DCM was doing well in 2015 but started down the road of declining revenues and net income in 2016 and 2017.Now.as it appears, DCM is again back on track.
The New Acquisitions
There is no doubt in this blog's mind that the new acquistions have been key to putting DCM back on track.Data Communications Management does tell us about a few of these acquisitions but this blog feels that the ones not mentionned in the quarterly report are more important.Over the past two years DCM has acquired 4 printing operations including Eclipse,Thistle,Bolder Graphics and Perennial.But it also has acquired Iotum a small junior telco and has a position in another small American telco.This while having only 21 million shares outstanding. which is a relatively small capital structure.
Turning the Corner
DCM was making more revenues and even more income in 2014 and 2015 but 2016 and 2017 were not as good.Back then Data Communications was making more revenues from printing and business forms.Their margins were not as thick; now they have a more complete technological mix ,especially with the acquisition of Iotum.As a result their margins are now greater on all sales.This blog has recommended a further investment in another small digital telco especially as it still has such a small capital structure.However it does not recommend dropping the printing operation.The perfect solution is to further digitalize their printing operation.Even with little progress on a new acquisition this blog expects adjusted EBITDA for 2018 of almost $25 million and net income of $2.5 million.This will produce adjusted EBITDA of $1.25 per share and net income per share of $.11 to $.12 per share.This should be enough to raise DCM from it's present price to the $1.50 to $1.75 price level in early 2019. https://www.otpp.com/home http://www.datacm.com/
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