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Aug
24
Quorum Information Technologies shows strength in its numbers
Posted by: Gerry Wimmer
8/24/2014
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TOP IDEAS: Sales and earnings continue to build at Quorum Information Technologies Inc. (TSXV: QIS). Growth investors should start taking notice.



Read the 2014 second quarter Management Discussions & Analysis (MD &A) for Quorum Information Technologies Inc. (TSXV: QIS- $0.23) and the numbers tell the story. A story that is good for shareholders.

Quorum Information Technologies automates integrates and streamlines every department in an auto dealership with its advanced Dealership & Customer Relationship Management System (DMS) software products - XSELLERATOR™. Quorum's software offering goes well beyond traditional DMS systems because it has integrated customer relationship management (CRM) tools, measurable processes that can help dealerships generate more revenue. Of the 20,000 franchised automotive dealerships across North America there are about 280 (and growing) General Motors, Chrysler Subaru, Hyundai, KIA, Nissan, NAPA and Bumper to Bumper dealerships that utilize the Company’s software products throughout Canada and USA.

2014 is fast becoming a milestone year for Quorum’s financial performance. Sales are strong and the Company is reaching a critical mass of business when each dollar of revenue growth contributes more and more to it’s profitably. This observable fact we first noted in our introductory blog post (See: Quorum Information Technologies delivers value for auto dealerships and small cap investors) and there has been more evidence since.

For Q2, the Company reported its sales jumped 23% to $2.4 million ($1.95 million is recurring.) With the higher revenues, earnings are expanding. Quorum’s EBITDA for the same quarter increased by 84% to $431,000. To this point we discover that the Company’s financial strength continues to build. Quorum’s cash holding have increased by over $438,000 to $1.25 million since the beginning of this year. The Company has very little debt.

The recent financial results reconfirm our opinion that Quorum’s represent an immediate investment opportunity for both small cap growth and value-wise investors. As one of Investorfile’s Top Ideas we still believe Quorum’s stock should be accumulated up to a price of $0.40 per share.

As noted, we deem the Company has reached a critical mass of auto dealerships that use XSELLERATOR™ DMS, leading to Quorum’s improving operating efficiencies. Therefore, this represents a very time favourable time to invest in this small cap stock should the sales continue to grow. Management has said in its most recent MD &A filing that they expect sales from Quorum’s suite of DMS software products to continue to grow over the next several years. If so, this will be very rewarding for shareholders of the Company.

The Company has approximately 40.1 million shares outstanding.

Quorum Information Technologies website: www.quorumdms.com

Author Ownership Disclosure: TSXV: QIS - Yes


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.

Investorfile is not engaged in an investor relations agreement with Quorum Information Technologies Inc. nor has it received any compensation from Quorum Information Technologies Inc. for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Quorum Information Technologies Inc. through open market transactions and for investment purposes only.

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Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.