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A look back to the future for DDS Wireless
Posted by: Gerry Wimmer

TOP IDEAS: Stock price should head higher if DDS Wireless results are stronger.

In about 2 weeks DDS Wireless International (TSX: DD) is expected to release its 2011 annual results.

Therefore let's look back in time to give us inspiration for the future of DDS Wireless and its stock price.

The date was March 3rd, 2011 and DDS Wireless reported for the year 2010 it had generated revenues of $41.3 million, EBITDAS (earnings before interest, taxes, depreciation, amortization and stock compensation expenses) of $5.2 million (13% of sales) and earnings of $0.12 per share. The balance sheet was debt-free with excess cash.

That day, the Company's stock traded at $2.25 per share.

Fast forward one year to February 21, 2012, and DDS Wireless stock trades at $2.25 per share.

So I ask what has changed between then and now for DDS Wireless?

Here is what we do know:

For the first three quarters of 2011, the Company reported revenues of $33.2 million, EBITDAS of $5 million (15% of sales) and earnings of $0.11 per share. Q3's contribution was revenues of $12.5 million, EBITDAS of $3 million (24% of sales) and $0.10 in earnings per share. The balance sheet remained debt-free but with much more cash than the prior year.

Here is the kicker. The Company's guidance is that revenues will be greater than $45 million for 2011 ($12 million for Q4). Therefore the indication is that Q4 was another strong quarter for DDS Wireless.

Compiling this information, we expect DDS Wireless 2011 results will report revenue growth, significant increase in EBITDAS, solid improvement in earnings per share and guidance that 2012 revenues could be higher.

If the trends prove to be true, will DDS Wireless share price remain at $2.25? We don't think so!

DDS Wireless share price trades up 32% since Investorfile's first blog post: Buy for value, ride the growth.

Author's Ownership Position TSX: DD - Long

Read Disclaimer:

This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness. The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. is not engaged in an investor relations agreement with DDS Wireless International Inc. nor has it received any compensation from DDS Wireless International Inc. for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of DDS Wireless International Inc. through open market transactions and for investment purposes only.

Posted by: Derek
Good Call on DD


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Gerry: Thanks for small cap stock suggestions over the past 5-years. Your record is very impressive and your analysis has been excellent over the years. I think small investors (and fund managers) should pay much more attention to your work. I look forward reading your blog over the next 5-years!