Cliq Digital - My favourite stock

Cliq Digital AG (CLIQ)
BE
8
1
0
SA
Sheldon Adam
NOV 6, 2023

My favourite stock after spending the last 3 months looking though thousands of stocks worldwide. Here's a quick analysis:

  • Company market cap is currently around $120 million, with a net income of $35 million (PE under 4)

  • Despite this low PE, net income is expected to grow over the next few years. Revenue growth rate over the past 4 years has been 40%+ and Net Income has been growing at a similar rate

  • Low debt and good balance sheet position. All liabilities can be paid off with current assets.

  • There is a small necessary intangible asset expenditure which lowers the true earnings to about $30 million in my estimate

  • So what does the company do? They buy the rights to a bunch of sports/movies/TV series content and then sell Netflix like subscriptions to access the content.

  • They made a change to their advertising strategy in 2019 by bringing their advertising team in house instead of paying external contractors

  • Due to this change they've managed to improve the results of their advertising spend and increase revenue the 40%+ per year rate

  • Their annual reports state that they sell these media subscriptions under a range of brand names. I've searched these brand names and the websites don't offer much information about what media content you get for purchasing a subscription

  • I suspect their subscriptions are sold through a more scammy sort of advertising scheme, the type of ads you'd get when watching a free sports stream online

  • Their users on average last 12 to 18 months so they're probably realising that it's not good value for money (but they're paying for a while before cancelling)

  • Despite all of this, net income will likely reach $50 million by 2025. If you bought the stock today for $18 per share, each share would likely be earning around $8 per year by 2025. Not a bad payback on your investment!

  • I've tried to be as objective as possible in my analysis, giving both my positives and negatives. I won't tell you whether I think it's worth investing or not - that's for you to decide...