Q: It's been awhile since you've been asked about and provided an opinion/update on NDVA. Even though putting money into this stock might be a bit of a flyer, could you please provide your comments on it, as well as what your expectations would be for their upcoming earnings report would be? Additionally, any concerns/comments on the private placement offering they've recently announced?
As always, your advice and insights are always greatly appreciated.
Thanks,
Don
As always, your advice and insights are always greatly appreciated.
Thanks,
Don
5i Research Answer:
NDVA is a small company ($19M market cap), and it is thinly traded. Its share price has been in a steady downtrend since 2010, and while it has recently bounced back a bit, it is still well below levels from years ago. Revenue growth has been OK, but its net debt is very high relative to its equity, and it is an unprofitable name. While the recent gains in the name may be enticing, we would prefer to not fight the downward trend that it has been in, and would prefer to look elsewhere in the small-cap space.
It announced a private placement for minimum proceeds of $2M and maximum proceeds of $4M. This may help some of its cash flow issues, but we do not believe it will be enough to stem the long-term downward trend that it has been in.