TOP IDEAS: It is no surprise that WANTED Technologies’ (TSXV: WAN) revenues and profits continue to climb as the business gains momentum.
WANTED Technologies Corp. (TSXV: WAN- $0.46) is emerging as the Investorfile’s blog most predictable small cap value stock - Top Ideas.
In our last blog post for WANTED Technologies (See: WANTED Technologies' Big Data Analytics generate Big Results for investors) we said that this Company’s revenue base is poised to get bigger and, therefore, the Company is well-positioned to continue to become more profitable.
Right we were!
Last week, WANTED Technologies released fiscal Q3 results. The Company reported quarterly revenues are up 19% to $1.8 million; record EBITDA of $495,000 and record net profit of $373,000 ($0.016 EPS). For WANTED Technologies, this was the fifth consecutive quarter of profitability leading to an EBITDA of $1.58 million and a net profit of $1.1 million for the trailing twelve month period (TTM).
What is driving WANTED Technologies’ earnings growth?
It is the Company’s recurring revenue base. In the last 12 months, the recurring revenue base jumped by 25% from an annualized value of $5.7 million to over $7.1 million (US dollars). In Q3, revenues derived from recurring revenue contracts represented about 94% of total revenues reported.
Is this growth going to continue? We say yes.
WANTED Technologies is the leading source of real-time business data intelligence for recruiting, the Human Capital Marketplace (HCM). According to management, the HC market is moving rapidly towards adopting a more information-driven approach to recruiting. With WANTED’s business model of providing cloud-based analytical solutions, it is an extremely efficient (and profitable) way to deliver these business data intelligence products to its customers. The Company’s products and services are delivered electronically via annual subscriptions (revenues are based on recurring fees) mostly to Human Resource (HR) professionals in Corporate and Staffing sectors in the USA. Currently 4,047 HR professionals are receiving WANTED’s data and analysis information. Subscriptions are up almost 100% year-over-year, according to the Company.
On a bigger picture, as the economy improves and unemployment rates fall, the need for WANTED’s products and services should rise and the Company’s financial performance will again reflect this increase in demand.
Not to be overlooked is how the strong financial performance of WANTED Technologies is impacting the Company’s balance sheet. The Company has accumulated over $2.7 million in cash (plus investments) and has almost no debt. This liquidity provides WANTED Technologies with the flexibility and resources to pursue options to grow its business.
In summary, the high percentage and growth in recurring revenues, profit expansion and the strong balance sheet make WANTED Technologies an intriguing small cap investment.
WANTED Technologies has 24 million shares outstanding.
Wanted Technologies website: www.wantedtech.com
Author ownership disclosure: TSXV: WAN - YES
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.
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The author of this article has acquired and may trade shares of WANTED Technologies Corp. through open market transactions and for investment purposes only.