DirectCash Payments Inc (DCI-T)

An interesting business. Part of him feels there might be some regulation coming to ATM fees and some of the charges their go through them. He would prefer other areas.

They have an offer from an industrial company to buy them out for cash. The share price is pretty close to the offer price.

In the process of being taken over. He had been short when it was announced. The ATM business is shrinking in Canada and around the world. It is an arbitrage situation at this point. He would not recommend buying more here. It is not a great business and there are not good chances of another bid here.

Being acquired at $19 per share. He sold his holdings at that price. The reason it is trading so close to the takeout price is that they are going to continue to pay the dividend until it is taken out. If you get taken out on the last day of January, you could potentially have an extra $0.48 coming in. You also defer capital gains until the next fiscal year.

(Top Pick Aug 26/15, Up 15.65%) It is still a very cheap stock. He recently sold a third because of the Brexit vote. It is paying a good, sustainable dividend. He is hoping to see organic growth in the next few quarters.

Private label ATM machines and post paid debit cards. They are global including Canada and Australia. As the world moves toward Apple Pay and other forms of transactions, consumers will realize they are paying a hefty fee for a private label ATM.

Basically an ATM business for Canada, Australia and the UK. Just released results, which were decent. There was a little bit higher maintenance CapX in Australia as authorities had forced all ATMs to move towards EMB chips in the cards, so they had to upgrade their ATMs to make them compliant before the year-end. Payout ratio jumped up to 72% from FFO. Still a very cheap stock, trading at about 6.5X EV/EBITDA. A great, long term story. Dividend yield of about 11%.

(Market Call Minute.) If it pulled back, it would be something he would look at.

(A Top Pick July 8/15. Up 13.98%.) An underowned name. ATM machines. Not a lot of analysts cover it. A stable business. Decent name for people looking for yield.

Has owned this in the past. Management continues to believe they can continue to pay the dividend yield of almost 12%. Payout ratio is very high, and the market doesn’t believe they are going to be able to continue to pay the 12%. This business is fairly tough and becoming more difficult all the time. It seems the company has been able to steady their numbers in the last couple of quarters. They’ll probably end up engineering the company so that it moves in a direction similar to something like what Davis Henderson (DH-T) did. At some point, they won’t be just ATMs, but will be in other areas as well. He would be fairly cautious on adding to your holdings.

(A Top Pick April 22/15. Down 13.98%.) The largest supplier of ATMs in Canada and Australia, and 3^rd largest in the UK. People are concerned that this is a declining business globally because of less use of cash. It is probably declining at about 3% per year. Stock price has dropped because of concern on the Australian ATM business because of the Tap & Go, but that was essentially a one-time event. Those concerns have proved to be misguided. Dividend yield is 11%, which he thinks is sustainable. Still likes.

Has a class action suit, but you will see that any time a stock has a big decline. He is Short this. Doesn’t think the dividend is sustainable. People are not using ATMs for cash much anymore. The company is taking on a lot of debt. Any time he sees a dividend that is north of 8%, that tells him it is probably not sustainable. Dividend yield of 12%.

Market is really concerned if they will be able to continue seeing the use of their ATMs increase, enough that they can maintain their dividend. From the looks of it, people are not going away from the use of ATMs. He is a little cautious on this right now because of the 12%+ dividend being so high. If they were to cut their dividend, that would probably be a sign to Buy the stock.

The dividend is secure. They have a 12% fee cash flow return. Earnings are forecast to improve from -.22 to a loss of .10 this year and improve next year.

Hasn’t had a great performance over the last 12 months, but he is still very positive on it. Probably the largest provider of ATMs in Canada and Australia, and #3 in the UK. An interesting cash business and a very cheap valuation. Likes the yield. Payout ratio is probably in the 50s-60s, so the dividend is sustainable. What has really hung the stock of late has been the performance in Australasia, and Australia particularly where they introduced Tap and Pay. Thinks this is a one-off reduction in their growth rate. ATMs have just had an increase from $2 to $3 which flows to their bottom line. Had a very good Q3. A great, long term story.