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Destiny Media Technologies is primed for a significant growth spurt and the stock price is up 50%
Posted by: Gerry Wimmer
1/20/2019
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TOP IDEAS: Revenues and profits are on track to rise as Destiny Media Technologies Inc. (TSXV: DSY) secures a bigger deal with Universal Music and other labels for use of Play MPE, a SaaS service for securely distributing content in the music industry.




Investorfile's share price accumulation target of $0.35 for Destiny Media Technologies Inc. was initially reached on December 3, 2018. 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 stock's potential worth, where there may be uncovered value that has been largely overlooked by the investment community


Destiny Media Technologies Inc. (TSXV: DSY – C$0.32) is already reporting consistent revenue growth and profits. But the recent deal with Universal Music and interest from other music labels are strong indicators that the best growth is yet to come.

Destiny Media Technologies is the provider of Play MPE, a cloud-based enterprise Software-as-a-Service (SaaS) used by the recording industry for promoting and distributing broadcast-quality audio, video, images, promotional information and other digital content securely through the internet. All exported songs are marked in real time with Destiny’s watermark technology, which has received numerous US and global patents.

The Company describes its Play MPE technology as a software system for the music industry to transfer pre-release broadcast-quality music, radio shows and music videos to trusted recipients such as radio stations, media reviewers, VIPs, DJs, film and TV personnel, sports stadiums and retailers.

Fiscal 2018 was a good year for the operations of Destiny Media Technologies. The Company reported higher revenues at US$3.6 million, EBITDA that almost doubled at US$812K and net income of $US656K, which was up 127% from the prior year. The Company earned US$0.01 per share for the year.

Destiny Media Technologies entered fiscal 2019 with strong momentum as well by reporting good results in its first quarter with adjusted EBITDA of US$246K and net income of US$220K. At the end of fiscal first quarter, the Company maintained a strong working capital position of US$2.5 million, made up mostly of cash and near-cash investments. Destiny Media Technologies remains debt-free. The Company reports all of its financial results in US currency.

Based on recent financial results, the Company has a very sound foundation. But the growth story for Destiny Media Technologies is just beginning and small cap investors should start paying more attention.

In July of last year, Destiny Media Technologies released a major upgrade (Version 8) for its Play MPE encoding software. The upgraded software featured many significant improvements and thus its usage is being embraced by the music industry; so much so that the Company just renewed a multi-year master agreement with Universal Music (a major label) that will generate a 14% increase in recurring monthly fees having commenced on January 1, 2019. Universal Music labels to date account for about 40% of the Company’s total annual revenues.

Destiny Media’s Management had stated (during its fiscal 2019 Q1 investor conference call) that its Play MPE business is seeing increased interest in many market segments and among many different music labels, including UMG, Atlantic and Warner, all which have commenced new usage of the latest version of Play MPE software. Thus, the Company is forecasting a long-term sustainable pattern of increasing revenues beginning in its third quarter of fiscal 2019. Management has said that it expects the new agreement with Universal Music to increase revenue growth in fiscal 2019 and that the increase in revenues will outpace the increase in costs so that, in the immediate future, profitability will increase, too. This statement is music to investors’ ears!

Investorfile had initiated coverage on Destiny Media Technologies and appointed the stock to its list of Top Ideas just two months ago (See: Destiny Media Technologies is a value buy that is growing and already profitable). Since then, the daily closing price of the Company’s stock had peaked at C$0.36 but has settled to around C$0.30, and up 50% in value from our initial recommendation date based on the last close.

Since we initiated coverage on Destiny Media Technologies on November 11th of last year, two sets of financial results have been released (Fiscal 2018 and Fiscal 2019 Q1) and the public disclosure of the aforementioned Universal Music agreement. Based on what has transpired, with confidence, we continue to encourage value-driven small cap investors to accumulate shares of Destiny Media Technologies up to a price of C$0.35. We feel this Company continues to be a very compelling growth investment opportunity. At this valuation level, there is still ample capital appreciation potential over time.

We note that in addition to Destiny Media’s shares trading in Canadian currency under the Canadian stock listing (TSXV: DSY), the stock also trades with higher daily trading volumes on OTCQX in the USA under the trading symbol DSNY, where the stock price is quoted in and trades in US currency.

The Company has approximately 55 million shares outstanding.

Destiny Media Technologies website: www.dsny.com

Author ownership disclosure: Yes: TSXV: DSY


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

The author of this article has acquired and may trade shares of Destiny Media 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.