Global UCaaS (Unified communication as s Service Market will grow from $18 billion in 2017 to an estimated $44 billion by 2021
Digerati Technologies, Inc (DTGI .18) micro-cap cloud play!
Digerati Technologies, Inc. is a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the business market. Through its subsidiaries Synergy Telecom and T3 Communications, the company is meeting the global needs of businesses seeking simple, flexible, reliable, and cost-effective communication and network solutions, including cloud PBX, cloud mobile, Internet broadband, SD-WAN, SIP trunking, and customized VoIP services, all delivered on its carrier-grade network and "Only in the Cloud" tm.
Brief History of DTGI
May 9th 2017--DTGI acquires T3 Communications, Inc., a provider of cloud communication and broadband solutions in Southwest Florida.
June 13, 2017- DGTI -wholly owned sub Shift8 enters into a Value- Added Reseller (VAR) agreement with FIS to serve the Kindergarten through 12th Education, along with the City and County Governments market in Texas. December 5, 2017- DGTI completes acquisition of Synergy Telecom, Inc. Synergy Telecom, Inc. a leading provider of cloud communication services in Texas. The combined Shift8/Synergy customer base, comprised of nearly 5000 business users. in Texas.
April 10, 2018- DTGI-Synergy Telecom has partnered with Telecom Consulting Group (FL) . This relationship offers TCG the ability to access Synergy Telecom's VoIP platform by providing highly-reliable Unified Communications and SIP solutions to their customers. TCG's has over 3000 agents nationwide creating huge revenue potential and penetration.
May 2, 2018 DTGI- The addition of T3 and Synergy brings together 2 emerging cloud communication service providers serving a broad range of customers in various industries including banking, healthcare, financial servies, automotive, legal,real estate, staffing, government and more. The transaction resulted in a profitable cloud telephony operator serving nearly 10,000 business users in Texas and Florida and generating over $6+ million in annual revenue. According to this presser, management believes that UCaaS solutions globally will reach $96 billion in value by 2023!
According to management, "the current acquisition of T3 enhances the current product portfolio for the company by introducing leading-edge network solutions like SD-WAN. SD-WAN, a software approach to managing wide-area networks for businesses, offers ease of deployment, central manageability and reduced costs, and can improve connectivity to remote or branch locations". Revenues from SD-WAN service providers is growing at 70% annually and it is estimated to reach $8 billion worldwide by 2021.
February 13, 2018- DTGI Shift8 Networks conbines into Synergy subsidiary. http://www.synergytele.com This domain name will continue to be used for sales, marketing, support, and knowledge base.
September 6, 2018 DTGI Recorded 4th Q revenue of $1.6 million, compared to revenue of $55k during the same period last fiscal year. The recent result includes the positive impact of 2 acquisition closed during FY2018 . Based on the most recent quarter's result, DTGI projected annualized revenue run-rate of $6.4 million moves the company meaningfully toward profitability and creates a solid operational and financial foundation for future growth The acquisition of Synergy and T3 contributed approximately $5.6 million in annualized revenue to DTGI, of which approximately 95% is contracted monthly revenue.
September 27 2018 DTGI Announces it has launched a mobile 'business continuity' solution in partnership with Otarris, a division of Kajeet Inc. for addressing the increasing demand for disaster recovery networks in the enterprise marketplace.
October 15 2018 DTGI hires Hayden IR, a national investor relations consulting firm, to implement a strategic investor relations program. The firm will work to raise DTGI visibility within the investment community.
October 29 2018 DTGI PLANS ADDITIONAL ACQUISITIONS WHILE TARGETING 25% ORGANIC REVENUE GROWTH.
Company's objectives for fiscal 2019
- continued emphasis on UCaaS/cloud communication business which operates in a segment of the telecommunication industry that continues to experience significant growth as businesses migrate from legacy phone systems to cloud-based telephony systems.
- Enhancements to its broadband product portfolio with an emphasis on marketing leading-edge network and business continuity solutions like cloud WAN, also known as SD-WAN, to its customers which the company anticipates will increase average revenue/customer.
- Targeting 25% YoY revenue growth and building on its solid operational and financial foundation of $6.4 million in annualized revenue to improve cash-flow profitability during FY 2019.
- Acquisition oriented targeting local and/or regional UCaaS/cloud telephony providers.
- Anticipate and planning up-listing either NASDAQ or NYSE American.
- NOTE: On October 11, 2018 the company entered into a letter of Intent with an established UCaaS/cloud telephony provider serving over 1500 SMB accounts and 14,000 users across various industries including Education, Health Care, Financial Services, and Real Estate. The company assume 1st Q Definitive Agreement.
November 7 2018-DTGI The company awarded $1.78 million in Multi-Year contracts.
November 19 2018 DTGI reports financial results for the 4th Q and Year ended July 31, 2018. Revenue up 2755 Q over Q. Revenue up 937% year over year. COMPANY ACHIEVES POSITIVE ADJUSTED EBITDA IN THE 4TH QUARTER. The Company incurred $1.71 million in SG&A expense for non-cash and one-time transaction expense for the year ended July 31, 2018 that includes stock compensation and warrant expense and one-time costs associated with its acquisition of Synergy and T3.
According to management, " The 4th marked an important milestone for DTGI , as we are reporting our first full quarter of consolidated results that reflects the integration of T3 and Synergy. WE ENDED THE YEAR STRONG WITH A REVENUE TREND THAT IS NOW LARGELY STABILIZED WITH THE FOUNDATION WE BUILT IN FY 2018".
January 22 2019 DTGI a provider of cloud services specializing in UCaaS announced that it has entered into an agreement to acquire a minority ownership stake in Itellum Communicaciones Costa Rica S.R.L, fully licensed telecommunication and Internet Service Provider.
The transaction is expected to close between Feb-April 2019. Itellum provides 1:1 international Fiber Optic networks, Cloud & Unified Voice Services and other data centric solutions.
THE BIG PICTURE:
Global UCaaS - unified communication as a service market is categorized by components which consists of Internet Telephony, unified communications, conferencing, VOIP and applications. Internet telephony has the most significant share due to its automated transmission of voice, video, fax and so on. By size, it is classified by small, medium, enterprise, and large. Small and medium enterprises are expected to the most significant share in the market due to the rapid adoption of unified communications networks to improve their business. Telecom & IT and Banking are leading in global UCaaS- unified communication as a service market among industries owing to the rise in technological advancements and demand for CLOUD-BASED COMMUNICATION.
By Geography, North America is dominating the growth of the global UCaaS. The growth in NA is mainly attributed because of the technology advancements and demands for UCaaS infrastructure.
UCaaS Features & Capabilities
- Enterprise messaging
- Presence Technology ( makes it possible to locate and identify a computing device)
- Online meetings
- Team collaboration
- Instant messaging
- Audio, web and video conferencing
- Call recording
- Centralized management
Please realize that there are many companies that are involved in UCaaS and many are top Fortune 100 companies. The growth of all aspects of the "cloud' is so large that there is room for all sizes.
In our opinion, DTGI intents to "roll up" as well as enhance their suite of products that can be offered in the US and now Central America.
This could be the perfect micro-cap ground floor opportunity within the technology segment of UCaaS.
- If you decide that you have interest in owning this micro please take a moment and review the current management team located within their website. http://www.digerati-inc.com
- The company is fully reporting and management talks about uplifting to another exchange as soon requirements are met.
- We know that current revenue are tiny, but management is aggressively pursuing additional acquisitions. Management mentions that at least 2 additional companies are being planned. The management team mentions that their current run-rate equals $6.4 million. This does not include any future acquisitions or expansion of existing client base and partnerships and joint ventures. Their intention is to grow by 25% annually via organic growth above and beyond the continued 'roll-up" of synergistic fits.
- At present there are around 14 million shares fully diluted and outstanding. It appears that management owns around 50% of the outstanding shares. It should also be noted that management takes half of their salary in cash and the balance in common stock. In addition, the majority of options and warrants are exercisable at .50 (well above the current market price).
- At present there is a $6 million NOL~ this cushions from paying any taxes and could easily be an attractive point of interest for possible acquisition candidate. This equals around .43/sh
- The current share price is near its 52 low vs the all time high of .60.
- According to "Gartner", UCaaS worldwide penetration amongst small businesses will exceed 45%. The reason is that cloud delivery solutions are much more accessible than costly on premise platforms.
- We believe that during the remaining fiscal yr 2019 that revenues will surpass $10 million in sales and show a profit ending July 31st 2019. Growth could actually be much higher depending upon potential acquisitions that are contemplated.
We rate DTGI with a strong speculative Buy recommendation at current levels and would not be surprised to sell DTGI trade in the $1 range. We see almost ZERO downside risk and an upside of 400% within 6 to 9 months.
It should be noted that micro-caps can be very volatile and most are extremely reactant to news. This company is very proactive with pressers, which adds to the attractiveness. This industry segment is behemoth with room for all sizes of players.
You may wonder why we have released this opportunity again?
Simple answer: It is extremely cheap and one day it will most likely get bought out.We confess that we tend to be discounted value oriented and look for opportunities that are overlooked. Many investor types never buy "pink sheet" stocks because they are not listed! As you may recall HEMA is a 'pink sheet" stock that was recommended at .35 and now sits @ $10.00! We will make money on TCOR it is just a matter of TIME!
Treecon Resources, http://www.treeconresources.com (TCOR)
Current price .40
fully diluted shares outstanding~ 28.3 million (management owns 50%)
9 months rev $65.5 million and net income $1.6 million or .06/sh.
Stated book value around $1.15
last year revenue was $70 million and net income/sh was .03
It is easy to see that revenue and income/sh has exploded during fiscal 2018. It is very easy to conclude that TCOR will reach revenue of $100 million or close to that figure and earning results for the year should reach .10!
The book value does not take into account the 5000 acres of timber land located within Texas and Louisiana. It is obvious that this land is worth many times the value that is stated on the books.
From our calculations the cash value approaches $4 million.
The company reports 4 times per year.
TREECON RESOURCES IS A HOLDING COMPANY THAT, THROUGH ITS SUBS, DISTRIBUTES, LEASES AND PROVIDES FINANCING FOR INDUSTRIAL AND LOGGING EQUIPMENT. THE COMPANY IS ALSO ENGAGED IN SAWMILL OPERATIONS, OILFIELD FLUIDS SERVICES AND REAL ESTATE.
TCOR is a hidden gem for patient investors that appreciate discounted value and very cheap fundamentals. The stock is trading at least 60% below stated book value. We assume that TCOR will earn around .10 for year ending Sept 30th 2018. The stock is trading at around 4X est. PE for fiscal 2018. The PSR is based upon $100 million in sales ending Sept 30th 2018~.11 est PSR ( value of 1 is consider very cheap). The current growth 2018 vs 2017 is around 30% (based upon $100 million vs $70 million last year) if we assume a PE of 15X vs current 5X the share price would be at least $1.50 ( 200% appreciation from current levels.). The stated book is now $1.15~ We assume the 5000 acres of timber is worth as much as $25 million so that might add another $1 in book. We are not sure, but could easily trade at three time book or $3.45. If we applied a PSR of 5x or 1/2 sales the share price would explode to a at least $2+ .
The most profitable business sub is the heavy equipment division that can be used in construction of Oil and Gas drilling and home and business construction and pipeline creation. There is a huge bottleneck in the movement of oil and gas and additional pipelines are needed to be built in order to move the products to the refineries. Another division supply fluids for the Oil and Gas industry. As we know Texas is the number 1 producer in the USA and TCOR is in the game. The harvesting of primarily Pine trees is the third division and adds to the mix.
It is easy to conclude that TCOR has entered a serious growth mode because of the economic climate that has overwhelmed the US since Trump has taken office. This company could also be in play as a takeover candidate because it is so mispriced.( at present 160 employees)
Recent conversation: business strong having hard time finding workers. The oil and gas and heavy equipment business remains very buoyant.
We rate TCOR with very strong BUY rating at current levels for short and long term appreciations.
- ARWR~ Our favorite biotech! We initially recommended ARWR @ around $2.20~ We are holding around $13.72 well off the high of $23 a number of months ago. We are surprised that ARWR has NO legs! The upside potential during 2019 because of existing trials and possible new partnership leads us to believe that this stock could double or triple during 2019. The stock is very volatile and offers great trading opportunities if you have the stomach. We like and own and believe it has the potential if the stars line up to appreciate to the $100/sh level sooner than later. We still rate with a strong buy recommendation at current levels.
- CVV recommended within the last newsletter. This stock has a $6 book and $4 in cash and the business for free. Has had some losing Q's but this will change because delayed contracts will surface. This stock could double in 1 day if a contract is released. 52 week range $3.60 to $15.00 We rate with a strong buy at current levels.
- Favorite domestic Oil and Gas SNDE see the latest presentation https://hotcopper.com.au/threads/ann-natixis-credit-conference-presentation4613981/ This domestic Eagleford play should be $9 instead of $3.00 . Only real issue are the Australian investors that are clueless. We rate with a strong buy recommendation at current levels.
- VUZI If you only look at the price during the past 3 years one would conclude that it is a "dog"! The company continues to get awards year after year and forms many partnerships, yet the stock continues to make new Lows! AR will eventually change the way people compute and conduct enterprise. We believe some of weakness lately relates to possible new dilution and weaker ER coming soon. We place a hold and believe we could test the 3's! We have held this stock for 3 years and there have been minor 'pops", but they have always turned into bull traps.
- Rhodium metal recommended $1480.00- currently $2400.00 We remain bullish toward the metal, but also like Platinum at $821/oz and continue to favor Palladium $1344/oz. We have little interest in Gold and silver~ it is just a "pipe-dream" which only gets legs once every 20-30 years.
- SPRS cheap stock - for the 9 months $23 million and net income of .10/sh (5.3 million shares)- bk around $1.00. stock price .63 Buy recommendation, but patience is needed
- CVM A feature opportunity a number of months ago. 1. received 2 US patents on platform technology. The therapy is a clinical and novel immunotherapeutic approach to advanced head and neck squamous cell carcinoma. . Multikine is designed to boost/enhance the anti-tumor responses of the immune system prior to standard of care treatment. Phase 3 is going to be completed very soon and if the result are successful this stock goes to the moon!!! The results could happen any day! When you consider that the current market cap is under $100 million and if clinical results prove successful we could overnight have a $3 billion dollar market cap. Speculative Buy with huge upside potential with some downside risk.
- CETX has been a super dog! There might be light at the end of the tunnel with their new "SmartDesk"! Read the recent pressers. At .80 most likely have little choice but to average down! Could be a positive surprise during 2019! Looks attractive at current levels.
- OPXS/OPXXW Our only military play. We are marching along and are heading in the right direction. We actually had thought that this stock would have appreciated more than it has, but reality is that it has been a turtle. We still favor the leverage of the 2021 warrants with an exercise price of $1.50 . The warrants offer extra ordinary appreciation potential- current price around .40
- ARCI It appears that management wants to get out of the recycling business and concentrate on Geotraq. The business for sale could fetch $30+ million according to management. If successful this stock could easily double or triple in price. At present ARCI trades at .50. Trading near its 52 week low. We believe that something is going to happen and you must be in at current levels to enjoy the "pop".
- Hemacare HEMA recommended at around .35 has been consolidating for months at $10.00. We believe a major breakout is coming when year end numbers are released during early March 2019. A quick play would be to buy shares at current levels for a trade. Perfect example of a "pink sheet" stock. This is why we continue to pound the table concerning TCOR!
WE MAY BUY, SELL AND OR HOLD AT OUR OWN DISCRETION .We currently own shares in CVM and have been hired for PR for 1 year .We wish to give credit to First Genesis Consulting for some their material that was used within this report
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