BigTinCan in a Nutshell

I previously posted this under BTH Fundamentals and reproducing for new shareholders

Big Tin Can (BTH) in Summary
Big Tin Can (BTH) is the mobile, AI-powered sales enablement platform leader. Bigtincan helps sales and service teams increase win rates and customer satisfaction. The company's mobile, AI-powered sales enablement platform features the industry's premier user experience that empowers reps to more effectively engage with customers and prospects and encourages team-wide adoption. Leading brands including AT&T, ThermoFisher, Merck, ANZ Bank and others rely on Bigtincan to enhance sales productivity at every customer interaction. Headquartered in Boston, Massachusetts, Bigtincan also has offices across EMEA, Australia and Asia.
What I like about BTH?

• Thematic Play

• • AI (Artificial Intelligence) is the new revolution changing business process landscape and is the investment flavour – a number of companies have already recorded significant price growth (if not hit all-time highs) e.g Appen, Yojee, Get Swift, Brainchip.

• Large US market and progressive global deployment

BTH is in the right market i.e US, being Boston based as USA alone has about 20m sales employees providing a huge $5B sales enablement market. BTH’s software is highly scalable making it deployable around the globe. Enterprise SaaS market is expected to triple in size by 2021. One recent Nasdaq customer of BTH secured offered 23,000 IPAD users and BTH charges around $35/month (may be discounted for large customers), so you can work out how big and how fast they can continue to growth if they secure similar size deals.

• Growth/Cashflow Positive

• • High year-on-year growth achievement circa 50% with a compelling ‘sticky’ annuity subscription revenue stream as a SaaS. By Dec 2017, annualised revenue expected to grow to $13m and latest quarter has already shown cashflow positive with $11m cash balance. This implies no share issue ahead as the case with tech start-ups. High margins of 80+% would ensure that when sufficient number of subscribers are on board, its operating (largely sales and marketing) expenses would be covered and BTH can start becoming profitable.

• Business Positioning/Development

• • BTH high growth reflects the entrenched presence and positioning that it already has in the sales enablement market, having with large bluechip companies such as AT&T, Merck, Palo Alto Networks, Guess, Hologic. BTH has also established strategic partnerships/relationships with Salesforce.com and Apple and also has AT&T as an equity partner.

• Great ProductFrom Smart Selling Tools.

• • Its high growth in subscriber adoption and success with pedigree multinationals is a testimony to a great product it has. Customer reviews suggest it has excellent AI, content management, sharing abilities and customisation as their key strengths. BTH was a 2017 CODIE Award finalist for Best Sales Enablement platform category. Also listen to this review- http://www.bigtincan.com/blog/smart-selling-tools-review-bigtincan-hub/

• Valuation

• • BTH was IPO at 26c, and while it is no longer trading at a discount to its IPO price, it is still very much undervalued vis-à-vis its peers- see peer comparison in my posting below (with 6 or more likes). Latest development is seeing Australian Ethical Investments increasing its 6% equity stake in BTH to 8% only recently, lending confidence to strong prospects of increasing capital growth as they wont be taking a stake unless with expectations of large gains ahead. The price at 27c is a mere 3.85% above its IPO price so there is still significant upside potential , potentially 50-100% when more deals or stronger revenue growth announced.

• Directors/Management has Skin in the Game

• I also like seeing that Directors have collectively about 42% of equity in the company; in addition to that about 84m shares or close to 50% of shares in issue are held in either mandatory or voluntary sale restriction, which explains why there aren’t many liquid shares in the market. For some worried about illiquidity, I think it is an opportunity because it wouldn’t require much demand to actually see the share price escalate. While there are reasonable employee share options, there are no evidence I can find of any ridiculous performance shares for directors like some of the other tech companies have which would only dilute existing shareholders. The MD’s pay is also reasonable at $300k per annum, so financial prudence is reflected in the management of the business.