Kape Technologies Share Discussion Threads

[micha14] 14/4/2019 21:35

@ Rivaldo. Future EBITDA of 14.2m$, ye, but lets look at free cash flow today? After loss from discontinued operations you are actually FCF negative. Even if I ignore that, for the sake of future prospects and apply Buffets FCF owner earnings, i come to 5m$ at best. With market cap of 160m$ thats a PE of 32. Ok, so let me agree to subtracting the 40m cash. 160-40= 120/5= PE of 24 . I agreed to subtracting cash and to ignoring loss from discontinued operations. I suppose conceptually if you are convinced the company has a lot of growth ahead one can just about justify it, but be aware that this is priced TODAY for a very rosy future tomorrow. look at 5 yr revenues, they have been falling! There is a case for buying here yes, but there is NO MARGIN OF SAFETY at this price, and so i am not a buyer at this valuation but am following till it drops to my comfort level as conceptually I agree this is a great stock to own

[nw99] 13/4/2019 20:21

Looks a buy here

[rivaldo] 11/4/2019 14:08

An EV of £93m (£123m m/cap less say £30m cash) now plays forecast $14.2m EBITDA and $11.7m PBT for this year.

At 6.9c EPS that's a current year P/E of only around 12.2 stripping out the cash, falling even further next year when 7.5p EPS is forecast.

And of course assuming the cash is utilised on earnings-enhancing acquisitions then the P/E will drop a lot more quickly.

[dround87] 11/4/2019 09:35

What's with the spread?

[micha14] 11/4/2019 00:44

Yes, BUT HOW MUCH ARE U PAYING FOR ALL THIS NOW?? whats the FCF? Whats the PE? whats the return on capital employed? 3.5 times sales seems expensive?

[igoe104] 10/4/2019 14:47

XLM operate in a highly regulated market, where governments are really clamping down. customers have to prove where the funds come from, when they drop a certain amount. also XLM have made a bunch of poor acquisitions. The only hope for XLM is getting involved in the USA market, in a big way ?????? In my eyes the stock is a pure punt.

Whilst Kape operate in a high growth market, that will grow double digit for many years to come, made some canny acquisitions and (don't have governments breathing down their necks.) Less risky investment, in my eyes for the patient investor.


And you sleep better night being a holder of Kape.

[basem1] 10/4/2019 09:51

Incidentally we are now the same market cap as XLM whilst I realise we are in totally different sectors I do believe you get a bit more bang for your buck with XLM. Similar cash piles too.

[hatfullofsky] 09/4/2019 22:50

They clearly state the cash will be used on user acquisitions and bolt on acquisitions. The more users, the more revenue, the more recurring revenue. Not yet time for a divi, Microsoft and Apple didn't pay any for decades!

[dave2608] 09/4/2019 18:18

Why pay a dividend when you can use that cash to make even more cash? I take your point about a small one though.

[basem1] 09/4/2019 16:42

Thought they would pay a dividend with all that cash albeit just a small one ?

[cheshire man] 09/4/2019 11:31

Well put dave2608,,,,,,,,,the very reason I continue to hold, nice turn on the chart here,,,,,

[dave2608] 09/4/2019 10:47

The revenues are lower because the business model has changed completely. You're not comparing apples with apples.

They are transitioning themselves from a pure play ad tech company to a player in the evolving cyber security market. Cyberghost was acquired in March 2017. There have been two acquisitions in 2018: Intego and ZenMate, with both integrations according to reports, ahead of management expectations.

In 2019's y/e figures there were only two full month's worth of ZenMate's revenues. In 2020 there will be twelve. In 2019's y/e figures there were five full month's worth of Intego's revenues. In 2020 there will be twelve.

Other things to think about. Divestment of Kape's Media division, announced in July 2018, to Ecom Online Ltd. As consideration, Kape will receive a 50% share of EBITDA from the Media division for the next five years following the sale. Growth of 219% in subscriptions to 830,000 (2017: 260,000).

That's some of the bull case for believing it's cheap.

[micha14] 09/4/2019 10:32

Not sure what makes you all think this is cheap, the GAAP earnings are a loss, ok, if we work out owner earnings they come to 5m$ in cash, so thata an earnings yield 3.2pc. This isnt cheap given that revenues are lower than they were 3 years ago. ROE and ROCE are in single figures. I am not a buyer unless it goes to 75p

[gymratt] 09/4/2019 10:03

Possible 'bowl' in the making to 110p.

[gymratt] 09/4/2019 09:54

Actual buy price is 84.95p. Showing as sells.

[ronwilkes123] 09/4/2019 09:06

With price moving up I'd say a good proportion will be seller clearing

[dave2608] 09/4/2019 09:05

There's certainly some huge trades going on. Not sure whether they are buys or sells.

[wardy333] 09/4/2019 09:00

Should move up from here.

[onjohn] 09/4/2019 08:45

She's on her way

[ronwilkes123] 09/4/2019 08:44

Are we clear boys

[dave2608] 08/4/2019 21:39

We'd need to know the reason for Milton offloading. Sometimes when a fund needs to convert to cash they offload their most liquid assets first. In other words the better stocks get sold before the others.

[ronwilkes123] 08/4/2019 16:47

Break back below 80p and I'm out

[ronwilkes123] 08/4/2019 15:23

Miton I thinkIt's happened recently on a few miton shares

[gswredland] 08/4/2019 15:20

Really don’t get the major seller