Friday, 24 May 2013

Analyst Says IWG Technologies Trading At One-Third Of Its “Fair Value”

IWG Technologies (TSX-V: IWG)
Basic Shares: 37.6 million
Fully Diluted: 39.7 million
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An analyst from Vancouver based Fundamental Research Corp. (FRC) has released an updated report on IWG and rate the Company a Top Pick based on strong ongoing sales and a 25% year-over-year rise in Q2/F13 revenues.

Analyst Siddharth Rajeev pleads a convincing case that fair value of the stock is $0.40 based on projected sales and high margins. It’s currently trading in the range of $0.12 to $0.14.

We can't post the report but it is available for free on the FRC website through registration here... 

The report calls for IWG to increase sales to $7.3 million in F2014 (Sept. 30) with a gross profit of just over $4 million and EBITDA of $1.78 million.  This would equate to 3.3 cents Earnings Per Share (EPS). 

Highlights include:
  • Q2-FY2013 revenues increased 25% YOY, from $1.46 million to $1.84 million. Revenues in the first six months of FY2013 were $3.19 million, up 17% YOY. The strong growth in revenue was due to growth in unit sales and service revenues.
  • Gross margins in Q2-2013 were 54%, an increase over Q2-2012’s 50%.
  • G&A expenses continued to drop YOY in Q2-2013.
  • Net income in Q2-2013 was $0.27 million (EPS: $0.01), up from Q2-2012 of $0.05 million (EPS: 0.001).
  • IWG’s balance sheet ratios continue to be significantly stronger than the Aircraft systems, components and equipment industry averages.
  • IWG shares are up 117% YOY versus TSX Venture’s negative 27%.
  • We have raised our earnings estimate for FY2013 to $0.93 million (EPS: $0.025), from our previous forecast of $0.85 million (EPS: $0.022).
FRC analysts will be discussing the report in an investor Q&A session:   

May 28, 2013, at 10:00 AM Pacific Daylight Time. To join the call:


Step 1: 5 Minutes before the call, please click: https://www4.gotomeeting.com/join/158146447
Step 2: Join the conference call:
Canada +1 (514) 907-7491
USA +1 (213) 289-0155
or
Canada +1 (888) 350-3035
USA 1 (877) 273-4202
Step 3: Enter the conference room/access code 5829680