Wednesday, 9 October 2019

A Canadian Stock Hitting New Highs After Announcing A Large Contract

Two weeks ago in "A Canadian Microcap Due For Takeoff" we recommended Condor Petroleum Inc. (CPI.TO) (CNPRF) when it was $0.26. It is trading at $0.335 now. Yesterday in "A Canadian Stock On The Rebound After Strong Financials" we recommended HIVE Blockchain Technologies Ltd. (HIVE.V) (HVBTF) at $0.21. It closed at $0.235 today. We are looking to go three for three with a recent strong performer that hit new 52-week highs today on the news of a large contract. It looks ready to break out. We are up to 866 followers on our ValueTrades blog despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. You can follow us on Twitter @StockTradePicks. We have nearly 4,000 followers on Twitter as well.

Gatekeeper Systems Inc. (GSI.V) (GKPRF) rose 16% to $0.18 today and hit a new 52-week high after it announced a $6.3 million contract that will be fulfilled by the spring of 2020. This is very good news as the company only has a $16 million market cap and is already profitable. GSI reported in its most recent quarter $0.6 million in net income on $4.3 million  of revenue. We could argue that the company was already undervalued just from that. Now that GSI signed this $6.3 million deal that is expected to be completed in the next 6-7 months, there should be strong revenue growth and increase in profits just from this one contract.

With a new 52-week high being made, GSI looks ready for a breakout. Its fundamentals support a higher price and its small float of less than 100 million shares suggest that it can run. We expect a minimum of $0.20 in the short term but can see this stock rising well above $0.30 and beyond, especially if GSI keeps signing more large contracts like this.

Abbotsford, British Columbia--(Newsfile Corp. - October 9, 2019) - Gatekeeper Systems Inc. (TSXV: GSI) (OTC: GKPRF) (FSE: 1GK) ("Gatekeeper" or the "Company"), a leading provider of high definition video surveillance systems developed to protect people in transit, is pleased to announce that its wholly-owned subsidiary, Gatekeeper Systems USA Inc., located in Bristol, PA, has been contracted by Southeastern Pennsylvania Transit Authority ("SEPTA") to supply and install digital video recorders (DVRs) on SEPTA vehicles and trains in a contract valued at approximately C$6.3 million.
The DVRs will include crash hardened memory modules for recording video evidence and will comply with the recommendations made by the National Transportation Safety Board (NTSB). The NTSB has investigated numerous rail transit incidents and has recommended the installation of inward and outward facing audio and image recorders and has identified them as being critical to improve operational safety and aiding in accident investigations. Delivery of the equipment is scheduled for Spring of 2020.
SEPTA is the sixth largest public transportation system in the U.S., providing over 300 million annual passenger rides for nearly 4 million people in Philadelphia on approximately 3,000 vehicles and trains. SEPTA is actively using video evidence as protection against fraudulent claims and has installed more than 27,000 video cameras on vehicles and in stations.
Doug Dyment, President and CEO commented, "Gatekeeper is focused on developing video-based solutions that are designed to protect people in transit. This contract award demonstrates our ability to design solutions that comply with NTSB's recommendations. We believe that all transit trains and buses should be equipped with video and event recording devices to improve safety and aid in accident investigations, in the same way black boxes are used in the airline industry."
Gatekeeper Reports $4.3M Revenue and $0.6M Net Income in Record-Breaking Third Quarter
Abbotsford, British Columbia--(Newsfile Corp. - July 23, 2019) - Gatekeeper Systems Inc. (TSXV: GSI) (OTC: GKPRF) (FSE: 1GK) ('Gatekeeper' or the 'Company'), a leading provider of video surveillance systems developed to protect people while in transit, today reported its financial results for the three and nine months ended May 31, 2019.
Financial Highlights for Third Quarter
  • Revenue for the three months ended May 31, 2019 was $4,308,506, the highest quarterly revenue in the Company's history and an increase of 70% when compared to $2,527,308 in the same period in the previous year;
  • Revenue for the nine-month period ended May 31, 2019 was $8,846,803, the highest nine-month period revenue in the Company's history and an increase of 70% when compared to $5,194,527 in the same period in the previous year;
  • Gross profit during the three and nine-month period ended May 31, 2019 was $1,973,883 and $4,027,298 respectively, which compares to $1,360,930 and $2,767,242 respectively in the prior year comparable periods and represents the highest nine-month period gross profit in the Company's history;
  • Net income for the three-month period ended May 31, 2019 was $616,572 or $0.01 per share, the highest third-quarter net income in the Company's history which compares to a net loss of $126,209 or $0.00 per share for the same period in the previous year;
  • As at May 31, 2019 the Company had working capital of $5,740,807, no long-term debt, and approximately 87.6 million common shares outstanding.
Management Commentary
Doug Dyment, President and CEO commented, "Our fiscal third quarter marks the third consecutive quarter of record-breaking revenues, and a return to profitability. We developed a strategy in 2018 to expand into the US transit market, and over the past year we invested in operations to support this strategy. Although we recorded net losses over the past year to make these investments, today's record-breaking quarterly results validate the meaningfulness of this strategic plan, which positions us exceptionally well for continued growth. Our employees are clearly motivated to deliver excellence to our valued customers, and we continue to strengthen our customer relationships - especially with our cornerstone customer in our transit business. We are also receiving increasing interest from the school bus market, as customers seek safety solutions for school children, and governments embrace the use of video evidence."
U.S. Transit Initiative
In April 2018, the Company executed a strategic plan to focus on the U.S. transit industry as a key growth initiative by establishing Gatekeeper Systems USA Inc. ("Gatekeeper USA") and purchasing assets of an existing mobile video surveillance service provider to the transit industry. This strategic initiative enabled a business relationship with the Southeastern Pennsylvania Transportation Authority ("SEPTA") which is the sixth largest public transportation system in the U.S., has an average weekday ridership of approximately 1.1 million, and is actively using video evidence as protection against fraudulent claims, with an installed base of more than 27,000 video cameras on vehicles and in stations.
The Company has already been chosen for several new contracts which include video solutions for SEPTA transit buses being manufactured by New Flyer of America Inc. (TSX: NFI), video system solutions for SEPTA trains, as well as ongoing video servicing solutions.
School Bus Vision Technology
During the quarter ended May 31, 2019, the Company continued sales and deliveries of its recently-launched SP25 School Bus Vision systems, which have 10-megapixel dual-camera systems for multi-lane viewing license plate capture capability, a high-speed license plate tag reader, and cellular network compatibility ready for remote, and auto downloading of stop-arm violations.
The Company has received increasing interest from school districts regarding the use of video evidence to help protect school children, following the increase in tragic deaths of several students who have been struck within the past year by vehicles illegally passing school buses in various states. The National Association of State Directors of Pupil Transportation Services estimates that there are more than 15 million school bus stop-arm violations per year in the United States alone. The Company is actively marketing its new SP25 product line and is supportive of the social movements and legislation changes that increase awareness and address the safety concerns for school children.
Financial Summary
        
 
For the three months ended
 
 
For the nine months 
ended
 
 
May 31,
2019
 
 
May 31,
2018
 
 
May 31,
2019
 
 
May 31,
2018
 
        
Revenue $
4,308,506
  $
2,527,308
  $
8,846,803
  $
5,194,527
 
Cost of Sales 
2,334,623
  
1,166,378
  
4,819,505
  
2,427,285
 
Gross Profit 
1,973,883
  
1,360,930
  
4,027,298
  
2,767,242
 
Gross Margin 46%  54%  46%  53% 
        
Expenses 1,424,785  1,519,016  4,654,795  3,844,983 
        
Operating Income (Loss) 549,098  (158,086) (627,497) (1,077,741)
        
Net Income (Loss) for the period$616,572 $(126,209)$(526,332)$(966,048)
Earning (Loss) per share -        
Basic$0.01 $(0.00)$(0.00)$(0.01)
Diluted$0.01 $(0.01)$(0.00)$(0.01)
        
        
 
May 31,
2019
 
 
August 31,
2018
     
        
Total Assets$7,840,198 $7,894,272     
        
Total Liabilities 1,271,061  873,817     
        
Total Shareholders' Equity$6,569,137 $7,020,455     

Full details of the financial reports and operating results for the three and nine months ended May 31, 2019 are described in the Company's condensed interim consolidated financial statements with accompanying notes and related Management's Discussion and Analysis, available on SEDAR at www.sedar.com.
Disclosure: We are long GSI.V

As we prepare for fall trading, we have to figure out what's next for Canadian Microcap stocks? TradeMiner identifies seasonal trends and market cycles and Microcap Millionaires finds the next big small cap plays in weed and other industries while Addicted to Profits makes trades from a Canadian perspective.

There are also some good books available such as:

Stock Investing for Beginners: Marijuana Stocks

Make Money Online With Cannabis Stocks: Learn This Basic Strategy and Build Wealth With Cannabis Stocks

Beginner's Guide to Investing in Canadian & US Pot Stocks

Marijuana Stock : Investing in Marijuana Stocks for Passive Income

How To Invest In Cannabis or Marijuana Stocks - Cannabis Investment Group

Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:

The dividend stock report from dividendstocksonline.com

Posted by at