ASX:BDT
BirdDog Technology Ltd
Investment Summary
The fund managers believe that BirdDog Technology Ltd is significantly undervalued, with its market capitalization of $11 million contrasted against a cash reserve of $21 million and $12 million in inventory. They suggest that the company’s challenges, including supply chain difficulties and a supplier dispute, have led to a perception of disappointment among investors, prompting sell-offs to avoid capital losses. In their opinion, if BirdDog can stabilize its operations, the share price could rise substantially, potentially four to five times within a year. Furthermore, they note that BirdDog's fiscal performance shows promising signs, with 3Q24 sales of $5 million and minimal cash outflows of $200,000. With new camera models receiving excellent reviews and orders, they foresee FY25 as a crucial turnaround year. Despite recent fluctuations in share price, the general consensus remains that the company represents an extremely attractive investment opportunity.
Commentary From The Managers
Cyan Investment Management
31 May 2024
$0.06
- Cyan Investment Management observes that BirdDog Technology Ltd (BDT) has returned much of its recent gains, down by 32.5%.
- The decline is attributed to the sale of a significant stake by one of the original founders, who no longer works with the company, at a substantial discount.
- Despite this, Cyan Investment Management asserts that it does not materially affect the Fund overall.
- BirdDog's new camera models have received outstanding early reviews and orders.
- FY25 is anticipated to be a turnaround year for BirdDog Technology.
- BirdDog's current market capitalisation stands at $11m, which is nearly half of its cash balance of $21m.
Cyan Investment Management
30 Apr 2024
$0.08
- Cyan Investment Management has previously highlighted the valuation gap of BirdDog Technology Ltd (BDT).
- BDT has seen a share price increase of 20%.
- The company holds over $20m in cash, with a market cap of $13m.
- It is rare for companies to trade below their cash backing; this typically occurs in high cash-outflow scenarios.
- BDT reported 3Q24 sales of $5m with minimal cash outflow of $200k.
- The company is conserving most of its cash, indicating financial health.
- Despite the share price increase, the stock trades below its cash backing.
- Cyan Investment Management continues to view BDT as an extremely attractive investment opportunity.
Cyan Investment Management
10 Apr 2024
$0.07
- Cyan Investment Management updates their investment thesis on BirdDog Technology Ltd.
- Fergie identifies the firm as a manufacturer of audio-visual equipment, focusing on conference applications.
- He believes the firm is drastically mispriced with a market cap of $11 million compared to $21 million cash on the balance sheet.
- An additional $12 million in inventory strengthens the financial position.
- Challenges include supply chain difficulties and a supplier contract dispute.
- Investor sentiment has led to capital losses as many have cut their losses prematurely.
- If the operational issues are rectified, there is potential for the stock to increase four to five times within the next year due to overselling.
- Cyan Investment Management continues to hold due to these mispricing opportunities.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.