D-Box Technologies (DBO.TO)

Added this to his growth portfolio about a month ago. The company is involved in technology with movie theatres. It has taken them a very long time to get penetration into the theatre market. Growing fast and has a good niche.

(Top Pick Apr 27/15, Up 32.26%) A Play on technology. The seats that move in theatres. They have really blasted off. They announced record results since he talked about it. There were huge announcements including initial rollout with Cinemark, 80 screens. All the US chains will follow suit. It is the beginning of a huge growth phase. CGX-T announced a continued huge rollout. There is a huge market in the industrial sector in training. With virtual reality there is talk of combining VR with motion in the seat. They are making money and have a record backlog. These are early days.

Manufactures “motion” seats for theatres. The stock chart looks good. Go sit in one first and see how you like it. He wasn’t impressed when he tried it.

Tried to buy this about a year ago, but it is pretty illiquid. A lot of theatres have a section roped off where the seats shake and vibrate through this company’s technology. A lot of upside was ahead of the Star Wars release. There is growth here and with the Star Wars he expects their numbers will be pretty good this quarter. A little too small for him, but he is going to take another look at this.

Wobbly seats for theaters (motion systems). With Star Wars they will feel like you are in a star ship. There is a lot of R&D. They are barely scratching the surface of the movie theatre chains. It is not ‘if’ but ‘when’ a big US chain puts in a big order for their seats. They have a huge backlog and have a recurring revenue stream. All they need is one order from China and their whole year is made. They have no debt, positive cash flow and a low market cap.

Has record profits for the year and recently came out with Q1 results that were out of the ballpark. They sell motion systems, mostly to movie theatres. They are programmed to the action films and collect money from recurring revenues from the sale of the seats. Also, have an industrial segment where they are getting a lot of orders. Expects they are going to have another huge year based on the backlog and the slate of action movies coming out. They sell globally, and only need one deal in China to make 50% more in terms of revenue. Very undervalued.

It is a long term hold for him. They should announce record results for Q4 based on their backlog. They are the only company in the world allowed to motion code Hollywood movies. There is huge upside potential. There is recurring revenue based on the tickets sold for their motion seats.

Their specialty is “Shake and Quake”. They add vibration to your theatre chair. Cineplex (CGX-T) has a variety of locations in Canada with these chairs. Unfortunately there is not a lot of coverage on the company. They are transitioning from paying for the installation, to getting their customers to pay for it. That would dramatically reduce their working capital.

Montreal based technology concerned with motion in movie theatre seats. CGX-T has been rolling them out in their theatres. They are the only company that has permission to motion code movies from Hollywood. They have a global monopoly at present. Tremendous international sales.