Opinions Stephen Takacsy, B. Eng, MBA
MDF Commerce Inc.MDF.TOTOP PICKApr 28, 2020
Stock price when the opinion was issued
As of May 22, 2024. Market Open.
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His biggest position. Not happy with KKR's offer of $5.80. Worth more. Still time for a higher bidder to come forward. Early days for digitizing procurement systems. De facto leader in that space. He's not selling, counting on biggest shareholder to negotiate a higher price.
It develops business to government and e-commerce platforms. It is the number one player in the U.S. and has some recent, very significant contract wins. It is a great turn-around story and is now profitable with positive free cash flow along with 80% of revenue being high margin. He sees good growth. Buy 2 Hold 2 Sell 0
(Analysts’ price target is $4.56)Still likes it, tremendously undervalued. Leaders in Canada and US. 6% market share in US, a nascent market. Recently announced 2 significant US contracts. Robust pipeline of states looking to digitize. Trades at barely over 1x revenues. EBITDA positive, improving every quarter. Lots of room still.
Still owns it. Came down with all tech stocks, and they made a costly acquisition. Also have an e-commerce business with clients like Sobeys; he thinks MDF may sell this and become a pure e-procurement company. He sees upside, because they have valuable businesses they can sell. Shares remain cheap. Growth will resume in the US with a recently acquisition.
Like Shopify, they provide e-commerce platforms to businesses, like Sobeys IGA, as well as in Europe. Also made platforms that let suppliers bid on government contracts. MDF is booming from the rush by corporations going online. Trades at less 1x revenues vs. Shopify 35x. Unlike Shopify's churn, MDF's businesses are highly recurring. He's been adding shares and now owns 5% of MDF. (Analysts’ price target is $7.30)