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Experts
Stockhead taps an extensive list of experts in Money Talks, our regular drill down into the stocks investors are looking at right now.
Today, we hear from Justin Rosenberg, executive director of corporate finance at Gleneagle Securities.
With global economies under stress due to COVID yet stock markets near all-time highs, it is difficult to find attractive buys at the moment, Rosenberg says.
“In this environment we prefer to focus on corporate activity (eg) IPOs, or placements for companies we know well that are at an inflection point,” he says.
“Our favourite below is Banxa, but you did ask for three, so I went searching!”
BANXA HOLDINGS (CVE:BNXA)
Banxa is an Australian company which listed on the TSX-V (Toronto Venture Exchange) in January at $1. It hit $8 within three months, Rosenberg says.
“[Gleneagle] raised funds for its IPO and raised again three months later at $4 with a 0.5 free warrant. As at the date of this interview, Banxa is $5.60,” he says.
The world is currently in a cryptocurrency boom, and Rosenberg says this Australian company is the FIRST crypto payment service provider to be listed in the world, bringing well needed transparency and governance to the crypto sector.
“Banxa is an internationally compliant fiat-to-crypto gateway solution for exchanges, wallets and other cryptocurrency businesses,” he says.
“Banxa offers global and local payment methods with no chargebacks and easy integration to your platform.
“They just announced Total Transaction Value (TTV) for February 2021 of CAD $70.4M (AUD$71.5M).
“This result is up over 980% from Feb 2020 based on the Previous Corresponding Period (PCP).
“This follows the January 2021 reported TTV of CAD $55M, bringing the combined TTV for Jan/Feb 2021 to CAD $125M, exceeding the December 2020 quarter TTV of $111M with a month still to go.”
Banxa has grown from zero to 50 exchange partners in the past 18 months with an addressable list of over 500 (out of a total of over 1,000) exchanges, Rosenberg says.
“We feel that revenue will continue to grow aggressively for at least two more years, providing great opportunities for share price growth over this time,” he says.
“Currently Banxa’s forward revenue multiple is around 10, which absolutely exceeds all its competitors in the crypto sphere.
“Capital raises are currently being held, presenting a priceless opportunity to enter into a promising company.
“Banxa is very much undervalued, because the stock is unknown, being an Australian company listed on the Toronto stock exchange.
“Banxa are in for a thrilling, expansive and promising 2021, as they continue to sign deals and partnerships with huge, reputable names.”
Market Cap: ~$122m
MedAdvisor is a medication management platform that helps patients more simply manage their medication and improve adherence, Rosenberg says.
“MedAdvisor’s highly automated and intuitive software system connects patients to tools and education materials from their local/preferred pharmacy,” he says.
“In Australia, MedAdvisor has connected over 1.6 million patients through more than 60% of Australian pharmacies and a network of thousands of GPs.
“MedAdvisor has recently partnered with HMS in the US, Zuellig Pharma in Asia and launched into the UK, (it’s) on track to become one of the largest players in the global digital adherence market.”
Thanks to their acquisition of Adheris, Medadvisor now has access to over 57% of US prescriptions, 180+ million patients and 618,000 prescribers, Rosenberg says.
“MDR appears to have bottomed and at 34c and forward revenue multiple of ~10, we believe it’s attractive,” he says.
“We expect newsflow ahead to be positive as MDR applies its tech capability to extract synergies from its US acquisition, Adheris.
“Synergies will include digitising the Adheris messaging product and cross-selling Medadvisor’s product in the US.”
Market Cap: $413m
Bigtincan is an AI-powered sales enablement automation platform that helps sales and service teams learn faster, sell smarter, and be more productive, Rosenberg says.
“Many organisations nowadays rely on this powerful software to carry out their customer interactions in a productive, collaborative and interactive way,” he says.
With 300,000+ active licenses, their customers include 35+ Forbes Global 2000 customers.
“A highly attractive attribute of Bigtincan is its consistent growth in annualised recurring revenue (ARR),” Rosenberg says.
“Currently sitting at $48.4m ARR as of December 2020, growing from $32.4m in December 2019, this is such a key performance metric within micro-cap B2B Saas technology companies which illustrates its strong revenue records – not to mention their 88% retention rate for 2021.
“Bigtincan’s revenue of $19m in 2021 has almost doubled from $9.4m in 2019, which is a reflection of their outstanding margins within their subscription revenue streams.
“Currently holding $34m cash, Bigtincan’s balance sheet looks strong for its 2021 goals and aims, including the focus on retention and ARR growth, as well as new instrumental acquisitions.
“With a forward revenue multiple of ~7x and a revenue growth rate of ~40%, we believe BTH is attractive around the current price [as of this interview] of 88c.”
Justin Rosenberg has advised and raised capital for start-ups for over 22 years. Rosenberg with fast-growing companies — primarily in the Software-as-a-Service sector — to help them find the board, partners, customers and funds they need to succeed.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
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