Analysis - DDT
Price($) 0.34
NTA ($) 0.09
P/NTA 3.8
Team 0
BurnPeriod -27.01
ProductPipe 0
ForeignMarket 5.8
Cash:Debt 3.82
DataDot Technology is a CSIRO spin-off company that commercializes hi-tech identification and authentication marker for products. It targets the automobile market as well as other high priced equipment. The company has subsidiary and business worldwide over several continents.
In terms of financials, the company is still a loss making company. However, the recent 2nd Qtr 2007 results is cash flow positive for operaions with highest operating receipts over the last 8 quarters analysed. Although it there was one other quarter (Q306) where it was operating cash flow positive, the cash at hand then was $2.17m compared to the recent quarter at $6.37m. Cash pattern indicates seasonality but recent business news would suggest increase in revenue going forward, possibly being profitable within the next 4 quarters. For such hi-tech business, first time profitablity make cause major re-rating of the stock.
Other financials include a modest debt to equity of about 20% and a healthy cash to debt ratio of 3.8 times. At Price/NTA of about 3.8 times, DDT is not expensive considering potential upside in acceptance of technology and beginning of penetration into world markets.
The stock has been trending down reaching just below 30c in the last few weeks before surging to 35c recently due to favourable reports on the technology.
Recommendation buy at 34c, expect reaching 60c within 2 years.
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