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Again we say: What's not to like about RDM Corporation
Posted by: Gerry Wimmer

TOP IDEAS: RDM Corporation (TSX: RC) delivers on earnings and dividends. The stock is up 247% and major catalysts are still to come.

Investorfile's share price accumulation target of $1.35 for RDM Corporation was reached on November 22, 2012. For the record, we do not revise share price targets for our Investorfile Top Ideas Ė Small Cap Value Stocks. We have positioned our blog to be one of the first providers of a pragmatic perspective of a small cap company stock's potential worth, where there may be uncovered value that has been largely overlooked by the investment community.

Yes, we admit, our blog posts for RDM Corporation (TSX: RC - $3.05) sound like a broken record. But that has turned out to be a good thing for small cap investors.

RDM Corporation is a provider of Remote Deposit Capture (RDC) technology: specialized software and hardware products for electronic payment processing of digital images of cheques. RDM payment solutions are utilized by four of the top 10 financial institutions in the United States. The Company processes over $600 billion in annual payments and serves 32% of the top 100 Fortune 500 companies including brokerage firms, big box retailers, healthcare and insurance providers, and government entities in the USA.

The Investorfile blog named RDM Corporation (RDM) to its list of Investorfile's Top Ideas Small Cap Value Stocks in January 2012 (See Ė RDM Corporation: Cash-rich small cap turnaround, offers value and opportunity.) At that time we were the stock's only real cheerleader. Later that same year, with the stock price up 48%, we cheered a little louder with another blog post (See - Two million more reasons for investors to like RDM Corporation.) The following year we continued in our pursuit to drive investor attention to this Company. At that point the stock was up 88% when we wrote this RDM blog post in 2013 (See - Once a turnaround; now a growth story: More investors should tune into RDM Corporation.) It was in 2014 we wrote our next RDM blog post. The stock was trading 161% higher and the Company was still generating financial results worthy of more investor attention (See - For growth investors: What's not to like about RDM Corporation.) In that post were we concluded that the appreciation potential for RDMís stock price is stronger than ever.

Today we feel the same and RDMís stock is up 247% from our first blog post. Here's why the Company's share price could continue its rise:

1. Last week RDM reported its fiscal 2015 Q1 results. The Company's adjusted EBITDA improved 30% to US $1.38 million and net income rose 44% to US $1.12 million or US $0.05 per share. It ended Q1 fiscal 2015 with cash totaling US $23 million (US $1.06 per share). The Company boosted its quarterly dividend payout by 50%. RDMís management has said they continue to see evidence of strong market acceptance of their products and services and that their sales pipeline remains strong.

2. RDMís functional currency is the US dollar. Currently all of the Company revenues are generated in US dollars from US-based customers. Based in Waterloo, Ontario, RDM operating costs are in Canadian dollars, thus creating favourable margins.

3. The Company is attracting a wider investor audience. Twelve months ago no investment houses provided research coverage on RDM. Today there are four analysts, all which rate the Company's stock as a buy.

Notwithstanding our points above, the biggest catalyst for the stock's appreciation potential in 2015 is the utilization of the Company's cash for acquisition(s). Otherwise RDM itself could be acquired in a takeover bid. Either way shareholders should gain big.

RDM has approximately 21.6 million shares outstanding.

RDM Corporation website:

Author's Ownership Position TSX: RC - 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 RDM Corporation nor has it received any compensation from RDM Corporation for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of RDM Corporation 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.