Investorideas.com

Call 800 665 0411 to learn about our services

Search   Follow Investorideas on Twitter   Investorideas is on Facebook   Investorideas is on Youtube   Investorideas is on Pinterest  Investorideas is on stocktwits   Investorideas is on tumblr   Investorideas is on LinkedIn   Investorideas Instagram   Investorideas Telegram   Investorideas Gettr   Investorideas RSS



Share on StockTwits

Canadian Marketing Co. Pivots From Print to Digital

Source: Streetwise Reports

 

August 11, 2022 (Investorideas.com Newswire) One of Canada's largest printing and marketing services company is growing its coffers by expanding its digital footprint.

Data Communications Management Corp. (DCM:TSX; DCMDF:OTCQX), one of Canada's largest printing and marketing services companies, is expanding its digital services and growing its bottom line.

The company saw a reduction in orders during the COVID-19 pandemic, but now continues to gain momentum and posted an 23.4% increase in revenue for the second quarter of 2022 compared to Q2 2021, it announced Tuesday. It also saw a 29% increase in gross profit in that time to CA$20.4 million.

Analyst Noel Atkinson of Clarus Securities called the Q2 results "monster."

"DCM achieved a spectacular quarter, driven by strong customer demand and the ability to start passing through some input cost increases to clients," he wrote in an August 10, 2022 update note.

In 2021, the company launched its digital asset management (DAM) cloud solution, ASMBL, to manage corporate media files and other content. The technology has the potential to become a substantial contributor to DCM's income as it is deployed to the company's 2,500 corporate clients, Atkinson said.

"DCM has decades of experience in handling digital assets and its enterprise client base is already comfortable with DCM doing that for them," Atkinson wrote in another research note. "DCM's new DAM offering will carry gross margin far above the corporate average and should be differentiated by being 'bundled' with DCM's production capability-unlike pure-play cloud software competitors that lack such a moat."

Atkinson reiterated his Buy rating for the stock and raised his target from CA$2.50 to CA$3.

Before the second-quarter results were released Tuesday, technical analyst Clive Maund said there was a "high probability of a significant rally once results are released, Data Communications Management is rated an immediate speculative buy."

DCM has been in business for 60 years. It helps companies with branding, communications, and logistics, and provides customer loyalty programs, data and content management, location-specific marketing, labels and asset tracking, multimedia campaign management, and workflow management. Its clients are in many industries, including financial services, health care, emerging markets, retail, non-profits, energy, hospitality, and transportation.

Digital Platform Key to Future

The company continues to see momentum increase in its customer base as its clients recover from the pandemic, Atkinson wrote.

"Recovery in order volumes from the office/store segments hardest-hit during COVID (retail, financial services) should remain solid in Q2/22e - perhaps the first 'post-COVID' quarter in Canada, and then moderate to normalized levels," he wrote.

About 95% of DCM's revenues come from marketing and business communications, including personalized print, Chief Financial Officer James Lorimer told Streetwise Reports. But about 30% of that revenue is generated through its digital platform, which enables companies to order and run campaigns in the cloud.

"Our objective is to grow that from 30% today to 75% over the next five years," Lorimer said. "Print is still going to be an important part (of our business). But digitally enabled workflows are really what we're focusing on."

What DCM does with print further differentiates it from other companies, Lorimer said. It helps clients develop more personalized campaigns targeting groups and even individuals.

"You're not printing one magazine and sending it to millions," Lorimer said. "You're customizing direct mail. ... It's been a more personalized, customized material."

Atkinson, the analyst with Clarus Securities, said the DAM platform is a key to the company's future.

"The company consolidated capacity, cut costs, and is well-positioned to win new large clients with its DCM Flex on-demand platform," he wrote. "We expect (year-over-year) revenue growth in 2022e and 2023e with modest improvements in gross margin each year."

DCM Directors and officers hold 31.1% of the company, and employees own close to 4 percent through an employee share program. It has a market cap of CAS$57.28 million with 44.06 million shares outstanding. It trades in 52-week range of CA$1.45 and CA$0.93.

Disclosures

1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Data Communications Management Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

More Info:

Investorideas.com Newswire

This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders


Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.

More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com

Global investors must adhere to regulations of each country. Please read Investorideas.com privacy policy: https://www.investorideas.com/About/Private_Policy.asp


Follow Us on StockTwits






Tech Stocks - Tech Stocks Directory, Tech Stocks News, Research and Resources

Get more Technology stock investor ideas - news, articles, podcasts and stock directories