D-Box Technologies (DBO.TO)

A very good buying opportunity. He’s been buying at around $0.40. A bit of a lumpy business, depending on where the backlog stands. The backlog has been down a little in the last few quarters, because they haven’t announced too many seat deployments. They are working on multiple fronts such as virtual reality, home theatre, but the big upside is going to be increasing penetration in movie theatres with their motion systems. Because there is a big CapX program going on in North America, to replace the seats with recliners, they have developed a reclining seat with a motion system in it. Also, thinks China is going to blast off for them as some point. These things take time so you have to be patient.

He is a skeptic about their product. Paying a premium to go into a theatre to have your chair shake seems funny. It is too small to Short at this point. He’ll wait till he gets bigger.

One of his top ten positions. They have huge growth potential. It is still early days. China is building so many theatres per week and some theaters are only DBO-T seats. CGX-T is on their third roll out.

Powered seats for movie theatres. They have deals with companies like Cineplex, large market theatre chains. He likes the longer-term growth, but because it doesn’t get a whole lot of coverage, it is quite volatile. They have developed massive inroads in China, and just did a deal with a company who has to purchase so many seats. A high-risk name.

Has always been skeptical about the D-Box technology. They have had some success in China of late, which is why he thinks the stock has popped.

Does motion seating for theatres. A small-cap and is volatile. Sometimes it will move 5%-10% on little or no news. They are moving into China and have just signed a contract with a company where the whole auditorium is going to be all D-Box seats. This is a good sign and thinks they will continue to sign contracts. Every time there is a new theatre, you might see the stock move.

The management has been delivering. It is seats in theatres that move. No dividend. They will be supplying 143 systems in China. They are opening a motion code studio in China.

(Market Call Minute.) Getting increased penetration into theatres, and they have a deal in China. Really interesting and it has been a long time coming. The best is probably yet to come.

Has been skeptical about their technology of having chairs in Cineplex that shake appropriately with the movie.

He thought he would buy it when it pulled back, but he has not yet stepped into it. It fits the bill and will continue to grow. He would not be surprised if we saw a bigger deal in Asia and that would get the stock going. Add if it pulls back or hold if you already have it.

An extremely cheap stock. The world leader and the only company that supplies motion systems for movie theatre seats, as well as for the industrial market to train people in different types of vehicles. Also, video games and soon virtual reality. Have just started to scratch the surface in movie theatres. Cineplex has been rolling out D-Box seats for a number of years in many of their theatres. Cinemark (CNK-N), the 3^rd largest US theatre chain, just announced they are starting to roll out in the US. He has modelled this company to reach about a 3% penetration rate globally within the next 10 years. Feels this will follow a similar evolution as 3-D screens did. The stock has the potential to reach $1-$2 depending on the growth rate and profit margins they are able to maintain. They have a record backlog now and just announced record sales. Just opened an office in China. China is opening 30 screens per week. Trading at only 3X sales, which is not a lot for a technology company.

Has recently expanded its relationship with Cineplex (CGX-T). Also, did a deal with an Alibaba (BABA-N) subsidiary, which bodes well. Revenues have gone up quite smartly. The debt load is very, very reasonable.

This creates a motion seat for theatres. They had a quarter where the stock really got hit, down 16% over 2 days. The balance sheet is strong and there is a lot to like here. Feels they have a long runway for revenue growth.

He considers this to be under the radar a little, and yet they have done a phenomenal job of building their technology and are now really starting to sell it, giving a ramp up in their revenue. He is waiting and has it on his radar to potentially Buy on a pullback.

(Market Call Minute.) Great management. Have been doing this for a long time. Price might be a little ahead of itself, but he loves the products.