TOP IDEAS: For Investorfile followers, RDM Corporation
(TSX: RC) would be the 6th takeover for small cap value stock
picks, with more 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 – 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’s stock's potential worth, where
there may be uncovered value that has been largely overlooked by the investment
It was on January 29th of this year in our blog post about the takeover
of IWG Technologies (an Investorfile stock pick), that we reiterated: "Any one
of the small cap value stocks on our Top Ideas list could be subject to a
takeover bid.” (See: Another
takeover for an Investorfile stock pick.)
Fifteen days later we were true to our word.
On the morning of February 13th, it was announced that RDM
Corporation (TSX: RC - C$5.42) had entered into a definitive agreement
under which a subsidiary of NYSE-listed Deluxe Corporation is to acquire all of
RDM’s issued and outstanding common shares. Shareholders of RDM Corporation
will receive cash consideration of C$5.45 per share. The proposed
takeover is subject to approval at a special meeting of RDM’s
shareholders, expected to be held on March 27, 2017.
RDM Corporation provides payment processing services based
on Remote Deposit Capture ("RDC”), a deposit-taking mechanism that uses
technology to capture cheque images and data at corporate or merchant sites for
the electronic transmission of these deposits to a financial institution. US
Financials have steadily increased the deployment of RDC technology and, in
particular, RDM’s Image and Transaction Management Systems ("ITMS®”) software
to enable the elimination of many costly cheque processing steps while, at the
same time, opening the door for new and improved service offerings to its
The Investorfile blog was one of the very first documented
opinion providers on the merits of investing in the shares of RDM
Corporation following its turnaround. Prior to this post, we have shared 11
investment updates about the Company over a five-year period. For Investorfile
followers who invested early on by purchasing shares of RDM Corporation, the
pending takeover looks to be a very rewarding financial outcome.
Since we first introduced this stock as a small cap value investment
opportunity at a price of C$0.88 (See: RDM
Corporation: Cash-rich small cap turnaround, offers value and opportunity),
Deluxe Corp’s proposal to acquire RDM Corporation at C$5.45 values this stock
at 519% higher. If you include the dividends paid to RDM shareholders during
our coverage period, the total investment return rises to 708%.
Takeovers are never factored in for Investorfile’s Top
Ideas or share price targets. That said we do believe a takeover will become an
eventuality for many of Investorfile’s stock picks. Six of 18 Top Ideas
profiled in the Investorfile blog, including RDM, have been subject to takeover
or a privatization shareholder value-enhancing event to date. This has
generated substantial investment gains and, just as important, instant
liquidity for our small cap value stock ideas.
The Investorfile blog cannot predict with any certainty
which will be the "next” small cap value stock on our Top Ideas list to be subject
to a takeover offer, but we are almost certain there will be a "next” one. So,
stay tuned and invested!
RDM Corporation has approximately 22.6 million shares
Company website: www.rdmcorp.com.
Author's Ownership Position: TSX: RC - 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.
Investorfile.com 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.