Investment Q&A

Q: Hi 5i Team,
Would you add to existing positions in these two stocks or wait for a pull back?
Which one would you add to first at today's prices?
Thanks!

Q: Given Sangoma's market cap now and current valuation would 5i consider it worthy of inclusion in your model growth portfolio?

Q: Please comment on Q1.

Q: More a comment than a question, I just read your answer to a question asked by David. My understanding of Sangoma current cash and debt position is the following : on July 16, 2019, Sangoma closed a short-form bought deal prospectus offering of 14,846,500 common shares, at a price of $1.55 per common share for aggregate gross proceeds of $23,012,075. As of June 30, 2019, Sangoma had $11,724,000 in cash, therefore, it is fair to say that on July 16 Sangoma had ±$34,700,000 in cash ($23,012,075 + $11,724,000).

Following the acquisition of VoIP Innovations, Sangoma has drawn approximately C$46 million from a credit line provided by BMO and TD. Approximately CDN$22 million will be used to pay off all existing debt and around CDN$24 million to fund this acquisition. Since the acquisition is for US36,000,000 or ±CDN$48,000,000, Sangoma will withdraw CDN$24,000,000 from its cash reserve leaving approximately CDN$10,7000,000 in cash and will be have a debt of CDN$46 million.

Q: I have a nice profit in this company. Up over 50%. Time to take some profit or continue to enjoy the ride. What is the outlook for the company.

Thanks

Dave’s

Q: Any thoughts why Sangoma still trades less than 1X revenues (on forward guidance) despite having almost half of its revenues recurring. The Company has grown a lot and Management has a history of making good acquisitions. Do you think the stock is due for a re-rating more inline with its peers?

Q: What is 5i's opinion of Sangoma's Q4 and fiscal 2019 results and the major acquisition just announced? With the acquisition Sangoma's recurring revenues is 45% of total sales. You it be fair that a Company of this size now trade at a sales multiple greater than 1 when a good portion of revenues are recurring?

Q: Does Sangoma's latest acquisition reduce your concern of their lack of traction in profitability over the years?

Q: I'm looking to add one or more of these high growth, high risk stocks to my portfolio. How would you rank these companies?

Q: Is 5i considering a closer look at Sangoma Technologies for their growth portfolio and/or research coverage? The Company's management is consistently beating analyst estimates and the market cap is now over $100 million with a lot of value given the 4 analyst estimates going forward.

Q: Hi guys! I asked this question a few days ago and received no reply. Not sure what happened, it could have been on my end. I have equal portions of these 8 stocks in my TFSA. What do you think of these stock selections?
Thank You !

Q: What is 5i's thoughts about Sangoma's bought deal financing announced this morning at $1.55. Despite the dilution is it good for current shareholders given the Company's track record? Will it improve valuation metrics (trading multiples) going forward? Currently Sangoma trades less then 1X sales which seems very cheap against their peer group and other small caps.

Q: Would appreciate your analysis of their Q3 earnings that were released after close yesterday. At first glance, they look to be pretty solid.
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For the third quarter of fiscal 2019, sales were $28.92 million, 78% higher than in the same quarter last year and the seventeenth quarter in a row in which sales have grown from the prior year. For the first time, services revenue exceeded $10 million, continuing to grow in both absolute and relative terms.

Q: I am considering entering into a 2% position in ITC or STC. Or alternatively increasing my position in Namsys from 2% to 4%. Which option appears best?

Thank you,

Q: You mentioned that Sangoma Technologies got upgraded by Acumen Capital. What is their new target price? With a current market cap about $90 million do think the stock price and multiples will jump when the market cap exceeds $100 million? For example based on last quarter's revenue run rate the stock trades only 0.75 X sales despite its strong growth rate, profitability and good balance sheet.

Q: Sangoma has sprung back to life lately on high volume. Any news or analyst recommendations that may have spurred the move? I have a half position and was looking to fill below 1.50 but it looks like I may not get the opportunity. What do you think?

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