Cliq Digital - My favourite stock
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...