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Record Revenue for Adcore

Israeli-founded digital advertising firm Adcore (ADCO) began trading on the TSX Venture exchange less than a year before the COVID pandemic lockdowns began in early 2020. While that uncertainty created short term challenges in the market and with their business plan, the company has roared back with results that are thrilling both early and new investors.

Adcore was first introduced to our audience by Ryan Irvine and the team at Keystone Financial as one of their researched recommendations. CEO Omri Brill subsequently presented as part of the 2021 World Outlook Financial Conference Small Cap Investing series (CLICK HERE to watch).

The company just released it’s 4th quarter and full 2020 financials yesterday, and the revenue growth is nothing short of spectacular, up 219% for Q4 to $13.3 million and up 52% to $22.8 million for the full year. Adcore is one of those companies that has benefited from the shift to a stay-at-home economy. Their digital advertising technologies have become essential to clients around the world who now rely almost entirely on e-commerce revenue.

“We rebounded from a challenging first half of 2020 to an astonishing all-time high in revenues,” explained CEO Brill. “And we see the shift in consumer behavior and the effectiveness of digital advertising continuing in 2021.”

It also helps that Adcore stayed true to it’s aggressive strategic initiatives. In the past year the company announced new and expanded relationships with industry behemoths Shopify, Facebook and Microsoft. 2020 saw the opening of offices in Hong Kong, adding to the Tel Aviv, Melbourne and Toronto locations. A second China office was opened in Shanghai in early 2021. The company also graduated to the TSX main board and added a Frankfurt listing as well. A dual US listing is in the works for 2021. And with plenty of cash in the bank Adcore has the ability to continue it’s international expansion.

Adcore’s main challenge, as with many fast growing tech companies, is to ensure it’s bottom line performance keeps pace. EBITDA remains positive but did not move up relative to revenue. Investors are willing to be patient with such positive and bullish growth, but new all-time highs bring new and higher expectations.

According to Omri Brill, “this is a pivotal time as global businesses accelerate their digital transformation. We stand ready to help them increase their presence, brand recognition and success in the digital marketplace.”

 

Big Fat Idea – Platinum, Palladium and Rhodium

Jim Paterson, CEO of Valore Metals joins Mike to update him on the booming PGM market, and how investors can add exposure to their portfolios.

Good to Know (make that a must to know) – Yield Curve Control

Yield Curve Control

You’ll be hearing a lot about this if interest rates continue to edge up. Basically it means that the central banks create money to buy the government bonds needed to finance the deficit spending – and they buy them at low interest rates (yield). The Bank of Canada has bought over $300 billion in Gov bonds during the pandemic.
Many analysts think they’ll be forced to buy even more because inflation fears will precipitate more selling. After all, who wants to be stuck with a 10 year government of Canada bond that pays 1.5% if inflation is at 2% or more, which guarantees losing purchasing power.
During the pandemic interest rates would have been 3x higher or more because of the increased risk due to the pandemic fallout but 5% or 6% interest would push the government’s interest expense through the roof – plus cause massive losses in the bond market (remember bond prices drop when rates rise).
So the Bank of Canada stepped in – created hundreds of billions out of thin air and said we’ll buy the bonds thereby lending the government the money at record low rates.
But now rates on a 10 yr. Gov of Canada bond have moved from 0.46% in August to 1.5% in March. That’s a big difference when it comes to the cost of new borrowing.
So the big question is – how high will the Federal Reserve or the Bank of Canada let rates rise before they step in and create even more money and buy all the government bonds being sold in order to keep the interest rates down. In other words, CONTROL THE YIELD.

Mike’s Editorial

Every time the housing market moves up big government advocates demands a new tax on the sale of your primary residence – which of course was bought with after tax dollars.

Nearly $10 billion worth of global shipping traffic per day is being disrupted

 

This morning – Global Supply Chains could be stressed by the boat jammed in the Suez Canal. The lessons from the Pandemic offer an opportunity to rethink Global Infrastructure Spending – and mop up much of the money glut currently funding financial asset inflation!

It’s the No-See-Ums that create the biggest speedbumps for markets. Earlier this week I was talking about supply-chain finance breaking down. This morning it’s a rogue gust of wind that’s set actual real global supply chains a’tingle.

When a whale gets stranded on a beach what kills it is its own weight crushing its internal organs and the lungs. When a massive container ship jams itself across the Suez Canal, after a freak wind grounded it on a sandbar, it’s not as simple as just dragging it off – were that even possible. It’s the weight of the ship bearing down on its keel and internal structure that’s the killer. What would be worse than a ship blocking the canal would be a broken ship and containers and fuel spilling out of it. It took years to remove the wrecks of the Arab-Israeli wars from the Canal.

With luck and a good wind raising the water level, they may clear the Ever Given, but don’t make assumptions. Hope – as I keep reminding readers – is seldom an effective strategy. The authorities will be hoping, but it may take some time to lighten the ship, refloat it, drag it back down the waterway to unload and inspect it. It blocked the Canal at its very narrowest bottleneck point.

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