Jason Donville Pivot Technology Solutions Inc. PTG-T TOP PICK May 06, 2015

Had this is a Top Pick in May at $0.50. It is up a little, but through a really crappy market. Probably has been a pretty good relative outperformer. Trading at 3 or 4 times cash earnings, so it is really cheap. There are rumours that it is going to get taken out. If the valuation doesn’t get higher, it will get taken out either by management or some private equity guys. Really inexpensive and he suspects that within the next 6-12 months something will happen.

Has been a really frustrating stock, because they have a nice sustainable dividend yield of 9%-10%, but management recently attempted to do a transaction which would essentially allow them to buy out the company for next to nothing from shareholders. Feels the stock is weak right now people are concerned that management is not working in the best interests of investors. He has similar concerns. There is a dark cloud hanging over the management team. Thinks there will be some resolution on this. Just raised their dividend again and the payout ratio is low, so there is no dividend cut coming.

A reseller of computer equipment. A high revenue line with very low margins. Going forward, the catalyst will be execution and improving margins over the next couple of quarters. Thinks there is some upside on this. Generates a lot of free cash flow. Dividend yield of 7.23%.

Basically a seller of hardware equipment. A very, very low margin business, but they have a very good top line. They are going to generate $22-$23 million in cash flow, which is supportive of the dividend going forward. This has a large yield on it and he doesn’t think it gets hurt as rates go up. If they can improve margins just a little bit, they get good growth in the stock. Thinks this is undervalued.

It is a bit small cap for him. Reselling is a difficult business and margins are thin on large revenue. Price momentum is in the top 1% of the small cap space – it has very good price momentum, 2.6 times cash flow, higher on a price earnings multiple and a 6% yield. It is not liquid enough for him.

This is a micro cap stock and the company has slim margins. It has done well. You get a lot of leverage if margins do move up. It is a bit small for him. He wants to wait for a few quarters and see if they get their margins up.

(Market Call Minute.) Their distribution is doing quite well. Great opportunities to continue to grow in the US. He likes the stock. It's a great opportunity.

It is a bit small cap for what he does. A reseller. They had a big run-up and since then has treaded water. It picked up some negative price momentum. It has a high yield. It has skinny margins so there is not a lot of room for error.