Stocks We Like: Why we like Isentia

Stocks We Like, Technology & Telecommunications | Comments (11)

Stocks We Like: Why we like Isentia

The share price of media monitoring company, Isentia, has jumped around 50 per cent since listing in mid-2014. We’ve had a look at the company’s diverse businesses and international reach, and despite the price movements in 2016, we think there’s plenty for investors to be excited about.

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Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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11 Comments

  1. mark thompson
    :

    After watching your review on Switzer Dec year and your report on your site earlier this year I purchased shares in ISD.

    The share price today has been smashed

    Is your view that this stock is a long term buy as it is now down 34% on yesterdays closing price

    Thankyou

    • Scott Shuttleworth
      :

      Hi Mark,

      Whilst we do say this often, we cannot stress how important it is that investment decisions are not made on the basis of what you may view on the television/blogs. Please seek the advice of a licenced professional in this area.

      Our view is that the firm is likely undervalued at the current price but you must be mindful of both the upside potential and downside risks.

      All the best,
      Scott

  2. John E
    :

    Hi Roger,

    A bit of a bump for isd. My opinion is that the core business is growing as expected, and the recent (King Content) acquisition has caused this downgrade.

    Obviously time will tell. I’m prepared to give management some space to sort the issue out.

    Just wondering what your present views are?

    Thanks as always,
    John.

    • Roger Montgomery
      :

      93% of EBITDA is from the core Software as a service and value added services businesses. 7% is from content. The update doesn’t materially change our valuation or thesis. Note the business was bought for $48 million with a five year earn out for 50%. The business lost $2 million but the market cap of the group has fallen circa $140 mln.

  3. dean morris
    :

    Hi Roger, any thoughts on today’s price? Seems a big overreaction? Are you still a fan?
    Cheers.

    • Roger Montgomery
      :

      Hi Dean, Our valuation is virtually unchanged and the thesis intact. Keep in mind the business in question represents less than 8% of EBITDA. More interesting however is the change in commentary from management over just 84 days.

  4. Chris Z
    :

    Hi Roger,

    There has been significant volatility with ISD’s share price since this post. Do you still see significant upside for the share price? or has ISD’s instrinsic value fallen since today’s announcement?

    Interested to hear your thoughts,

    Chris

  5. Marco Mellado
    :

    Here’s a very different view on ISD.

    There appears to be some sensible thoughts in this piece.

    What do you guys think?

  6. John
    :

    Thank you Roger. Great article. I pulled the trigger again today @ $ 2.99. Feeling optimistic for Isentia future growth in the years ahead.

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