Adgorithms Share Discussion Threads

[hazl] 04/8/2015 12:05

More or less back to float price by the looks of it.

IMO

EDIT
Correction 133p at float

[stegrego] 04/8/2015 11:08

GHF effect - posts and a few mins later it's up 11 percent :)

[phowdo] 04/8/2015 11:06

Q4 will be the proof in the pudding. Still sceptical until then, but great to see they haven't made any silly slip-ups after IPO like some of these foreign listings seem to make a habit of doing.

[hazl] 04/8/2015 11:02

Yes, have been looking at them over the last few days and decided to take the plunge earlier.

[glasshalfull] 04/8/2015 09:29

Yesterday's H1 results demonstrated organic growth of 80% and highlight the growth opportunity for Adgorithms' proprietary programmatic advertising trading (easy for me to say ;-)



Importantly they mention that H2 growth is accelerating & they're on target to meet FY15 forecasts, which may also include higher margin SaaS sales.

Believe that Liberum have forecasts (in $) which equate to 8.7p EPS this year & 10.9p next (25% earnings growth). So PER 14-15 & when subtracting the £22m net cash on b/s this brings PER down to c.10

Like the fact they will pay divvy of 50% net earnings.

I've picked up a few over recent days.

Kind regards,
GHF



EDIT : 09/10/2015 - Significant profit warning that totally contradicted August update which indicated strong start to H2. Management have clearly misinformed market and this is share is now uninvestable. Sold out.

[paxman] 12/6/2015 17:35

phowdo,

Why did they list on AIM?

The Telegraph quoted the CEO Or Shani as saying:

“If you are Nike or a big brand like that you’re not going to do business with a company in Tel Aviv you haven’t hear of but you might do business with company listed in London.”

VCs?

More likely to request special terms - convertible loans, seat on the board. A VC would want to cash in within 5 years - maybe the management see this as a multi year opportunity.

£5m of stock sold by CEO and founders

The Admin Doc says they sold 8.3% of their holdings so not so much IMHO. If they were on the game they probably would have sold a higher percentage.

'too good to be true'

They are vulnerable to even better AI. I'd see that as the real danger to their business long term. What if Google targeted their market?

But for now I'd suggest it is what it is. The AI algorithm writers - they came out of Israel's military cyber elite program - are very employable - they could get jobs at investment banks/hedge funds and earn much more than what they took out at IPO - so I guess they see this as a huge opportunity.

I think they floated because they want to buy more customers. With more customers placing more adds they get more feedback data so their AI improves - a virtuous circle.

[phowdo] 12/6/2015 15:14

paxman,

Theres certainly upside potential. I think they can possibly do $40M in 2015, costs look to be ramping up at a great pace so profit of say $12M so PE of 10-12. Which would be fantastic for a company growing this fast with no debt.

However, this is their first round of fundraising so they would have been in a strong negotiating position given the figures in the prospectus.
So why did they list on AIM instead of the alternatives - list in Israel or elsewhere, VC, debt?

Perhaps the reason they chose to list on AIM is to avoid the scrutiny that other avenues would subject them to?

I note the CEO and founders have done quite well for themselves with this floatation: They distributed $2.7M (most of the cash balance) to themselves as a dividend just prior to the IPO and cashed in £5M of stock against £20M raised for the companies coffers.

I cant help but think this looks a little too good to be true. So I'm presuming there is something they aren't telling us yet...

[paxman] 11/6/2015 21:00

Thanks gersemi for the negatives.

I'd be surprised if revenue was in question - just because ad buying is very quick - there's no long tail future revenue to hide behind - you buy it and charge the customer quickly because you have to pay for it quickly - if you look at how they make 75% of their profit: they buy cheap impressions and sell on at a profit - that's a very quick business in terms of revenue recognition.

phowdo - can they keep up 300% growth in 2015 - no I wouldn't think so - maybe 100% to 150% but not 300% - but I could easily be wrong.

I can't help but ask: are you guys looking to build up a stake here? Probably no one's reading this board yet so divulging won't move the market.

[phowdo] 11/6/2015 19:16

Oh goody another Israeli tech company listing in London.
I reckon that revenue growth wont be maintained and give it 50:50 that it will actually go into reverse.

[gersemi] 11/6/2015 18:51

The sales increase figure does look highly suspicious.

Is it invention?
Is it revenue stuffing?
What is the company's policy on revenue recognition, ie how do they record revenues and when?


'One of the most common techniques used by public companies looking to artificially boost their income is to prematurely recognize revenues or simply fabricate them altogether. Exactly when revenues should be recognized varies greatly, but in the end, the point where payment and the delivery of goods are guaranteed is the defining criteria of when revenues should be realized.'..Investopedia

[paxman] 11/6/2015 15:47

Also some top clients - P & G, Visa, Fox, Kellogg's.


Some negatives from someone would be good.

[paxman] 11/6/2015 14:01

gersemi

Thanks for starting this board.

I'm trying to work out if there's a downside to this company. It looks like a no-brainer.

Cash generative. No debt. Cash in bank after IPO. A beneficiary of everything that's happening in online advertising like programmatic and reducing click fraud.

Insiders sold hardly any shares at IPO.

Also, artificial intelligence written by top algorithm writers.

I'm guessing a current P/E of single figures this year. But just a guess. The admission doc gives no real guidance except the business is growing like anything.

If there's anyone who knows any negatives, it would be good to hear them.

[gersemi] 11/6/2015 12:11

An Israeli start up. No idea about financials. It uses artificial intelligence to coordinate advertising campaigns

It seems the flotation of Israeli companies on LSE and in NY is all the rage at present so one must tread carefully