Digital Globe Share Discussion Threads

[essential] 20/8/2015 13:22

Flag forming??

[cheshire man] 19/8/2015 09:33

Will have to stop meeting like this Saucepan :-)

[saucepan] 19/8/2015 08:55

Hi folks, thanks for the shared research. I have joined you :-)

[yump] 18/8/2015 16:12

I think one of the key figures will be the combined cost of search engine costs + lead generation costs, compared to the equivalent periods last time.

That should be a measure of what can be expected from the changes in business model, in terms of the effect on gross margin.

Salaries and admin. would be expected to rise with sales expansion anyway, but the cost of customer acquisition imo is the crucial one. The difference between that and what they charge the customer, is what fundamentally drives the business.

Pretty easy figures to get at:

6 months to Dec.14:
Search engine exps: 4.4mln
Lead gen: 5.1mln

6 months to Dec.13:
SE: 6.6mln
LG: 1mln

Year to Jun 14:
SE: 12.7mln
LG: 5.9mln

It looks like the Lead Generation costs hiked in 2nd. half last year ie. rise from 1mln end of first half to give 5.9mln year end.

So likely that this full year will show the effect of the full LG hike and the (hopefully?) search engine cost drop.

[hastings] 18/8/2015 13:58

Nice to be in good company and thanks protean for posting the link.
Always dictated by space,so could probably have added further comment, but hopefully conveyed something of the potential that others have also identified.

I should be speaking with the CEO again come the results, so hopefully some more flesh on the bones, so to speak.

Cheers H.

[essential] 18/8/2015 13:43

I currently hold Xlm too and gave my holding a trim to help fund this purchase...both in the same market though

[rivaldo] 18/8/2015 13:41

Thx for the Cambridge News article.

It's nice to look at the thread header chart and ponder the potential upside if things go well :o))

[dlku] 18/8/2015 13:33

nice welcome GHF - have a look at XLM, soooooo cheap

[essential] 18/8/2015 13:31

Just bought into these. Chart looking very strong with what looks like a bullish flag on good volume. We shall see.

[protean] 18/8/2015 12:06

"On that basis, the shares on a 12-month forward view stand on a tantalisingly value looking PER of under 8, which also boasts a prospective yield of 6.6% –which looks far too cheap, particularly with the added support of close to £800,000 in net cash forecast on the balance sheet and which is expected to grow in subsequent years as the business demonstrates a continued ability to generate cash."

[glasshalfull] 18/8/2015 11:42

Just logged on & found this quiet board now full of respected posters...so a BIG WELCOME dlku !!!

Also nice to see you Mas, battlebus, fillipe & AISHAH ;-)Also good to find that you're still here rivaldo.
Hastings has kindly contacted me off-board & I'm looking forward to his Private Punter piece later
Today.

Yump - many thanks for responding to me & appreciate your thoughts and experience in this sector.

As I understand, affiliate arrangements have been renegotiated & dgsAPI platform enhanced...net result is reduced labour costs & diversifying away from paid search.

Proof as you mention will be the whether they gain traction in other verticals & in other geographies. Hopefully the preliminary results will confirm progress on both fronts.

Look good risk/ reward at this bombed out price.

Regards,
GHF

[dlku] 18/8/2015 10:22

Have you guys looked at XLM. Single figure PE, same sector as DGS and has about 40m in cash

[fillipe] 18/8/2015 10:16

Strong today .... + 12.1% - and it didn't take much buying got do that.

Abt only 30m shares in total at DGS and as at 30-6-2014, 78.02% of those were over 3%'s.

So, only chicken feed numbers available for any large buying.

Finals due in about 30 days.

f

[battlebus2] 18/8/2015 10:12

Joined the party today :)) the guest list was too impressive to ignore.

[yump] 17/8/2015 14:44

I've just been re-reading the March statement to see if I've got a bit spooked unnecessarily and should buy a few more, but have decided against.

There appears to be a lot of information on efficiencies and the development of the platform, but the detail on new verticals and markets is very small by comparison.

Don't know what to make of it really, other than the rating should catch up with the eps a bit. Whether it can get over a p/e of 10 before they actually deliver 6-7p eps - no idea.

By now I was expecting at least a couple of named large operators of something in Europe or outside the US. Perhaps they got in early in the US, or had the contacts...

The only conclusion that I can reach tentatively at the moment is that the 'lead generation' cost jumped because they are having to use affiliates a lot more to try to get into new areas, rather than having direct relationships - as they say - at reduced margins.

Also they talk about acquisitions, which sounds like they are finding that they will need to 'buy' access to big clients, by acquiring existing accounts through the acquisition of other paid search agencies, rather than entering direct relationships. That's OK if the profit drops through, but it does unfortunately bring to mind Blinkx, who embarked on an acquisition trail to expand revenue and client base, when their actual technology was supposed to be the dogs b........ and therefore irresistable to potential clients.

I'm left guessing based on my own knowledge of the market, as they haven't really said it themselves.

They have said 3 things that don't sound that great though: reduced margins + higher capex + higher operating costs. So imo some big revenue jumps will be needed to turn it into a growth, rather than a temporary recovery stock.

[fillipe] 17/8/2015 12:02

N+1 Singer. CORP, 13-8-15. 2016 eps 6.42p, div 3.28p.

Cheap to buy, on those numbers.

f

[fillipe] 17/8/2015 12:00

Also one of mine.

f

[masurenguy] 17/8/2015 10:40

Morning Rivaldo, GHF, Hastings & AISHAH. I've also joined you here today with just a nibble at 50p.

[aishah] 17/8/2015 09:18

They would be saving $10k to $12k per month if they are using the agreement with TRGI ( to get better FX rates:

"Under the FX Agreement, DGS Inc. can request the use of the foreign exchange services via TRGI and pay TRGI in USD the amount that DGS (Pvt.) Ltd. needs for its operating expenses. DGS (Pvt.) Ltd would receive the PKR equivalent of that amount (being 1% higher than that indicated by the median market exchange rate at the time of the request) from TRG Pvt Limited, a 100% owned subsidiary of TRGI. There is no counter-party risk to DGS as TRG Pvt Limited would contractually make the PKR available to DGS (Pvt.) Ltd prior to DGS, Inc. paying the amount to TRGI in USD. The utilisation of the services under Agreement is estimated to provide DGS with a cost saving of approximately USD10,000 - 12,000 per month and is expected to shorten considerably the time taken to complete the currency exchange. "

N+1 forecast eps of 6.42 for 2016 and dps of 3.28.
P/E of around 7.8, PEG of 0.09 and yielding 6.5%

[hastings] 17/8/2015 09:04

Also joined you Rivaldo and GHF, may be of interest.

[dlku] 17/8/2015 08:51

unless they say they are delisting and crash down to a few coppers

didnt the finance director resign abruptly , maybe getting confursed?

[rivaldo] 17/8/2015 08:43

Good to see you here GHF - and reassuring that you came to the same conclusion re the financials and prospects.

I too have an initial position here, awaiting further confirmation of the improvement in trading with the results in September.

It's certainly good to see the share price react so well to this morning's buying, suggesting that we might see good upside assuming the results are as expected.

[dlku] 17/8/2015 08:38

one for the delisting bin
should never have floated with only 2 customers