Peter Hodson RDM Corporation RC-T COMMENT Aug 04, 2015

Process cheques, but can do it more quickly. You take a picture of your cheque and send it to the bank, rather than taking it in physically. They do this for a lot of corporations, so have been able to gain a lot more market share. They are under the radar with only about one analyst covering it. Have a lot of cash on the balance sheet. Have looked for acquisitions, but because the stock is trading at such a multiple, it is hard for them to make something that is accretive. Feels either someone is going to buy them or they’ll pay a special dividend. He picks away at this when there is weakness.

A small cap company in the financial services area. They are the originators of taking a picture of a cheque. They recently increased their dividend. This is a high ROE stock.

A great company, with the $64 million question “what are they going to do with all their cash”. Too much cash is holding ROE down. Management said they are looking at stuff, but it has been a long time. The stock has performed well even without an acquisition, but if they finally acquire something, the stock will rocket ahead. If the same condition exists a year from now, investors are going to be very frustrated with management.

Recently bought some and still thinks it’s early days for them. This company helps with the payment structures for companies. It is in software as well as hardware, providing scanners. Expects this will have a run that will last for some time.

Was a Top Pick in the past. The recent quarter was not as strong as he would have expected and there was a sell off. He thinks eventually these guys will get taken out. It is underfollowed and is held rather tightly.

It has really been building since the run up of ’07. Investor interest is growing and he continues to buy it.

(A Top Pick Sept 28/15. Up 14.89%.) They’ve done well in terms of their earnings. Last quarter was a little lighter than what he would have liked, but they have a very sound balance sheet with about $1.60 a share in cash. Still feels comfortable with this. At some point he expects they will get taken out or will make an acquisition.

He likes the optionality. They do a lot of electronic checking business, and can sell units to a company to allow them to deposit cheques directly into the bank. If you need a picture of a cheque they have that technology. They deal with a lot of the biggest banks across the US. A very high recurring revenue business that generates a lot of cash flow. Has $30 million of cash in the bank. Less and less cheques are being used, which is a big knock against them. If they can use the cash in intelligent way at a reasonable valuation, the stock should react very favourably. This gives you a dividend and free cash flow along with a relatively stable, but declining business.

An E solutions provider for electronic commerce, and allows for payment processing. Thinks there is going to be a growing demand for financial technology for FinTech companies. Although he doesn’t own this, you are in the right sector and the right space. Expects there will be a continued demand for sectors and companies where Canada has some of the best growth stories.

This helps businesses process their finances quicker, check payments, financial back offices. It has bounced around for a while and thinks it has some upside. Has a lot of cash.