"If music be the food of love, play on"

I've suddenly realised I've developed an unhealthy appetite for investing in 'music related' companies in my portfolio. I've mentioned 7digital many times in the past, here's Simon Cole with a neater and shorter summary than I could give about the investment case for this company:-

https://www.voxmarkets.co.uk/company/7DIG/?mediaAssetId=5b8e4ba6a768f800118d1463&jwsource=cl

I've also mentioned a company called One Media IP (OMIP), and here's another quick and neat summary by Michael Infante about his company:-

http://onemediaip.com/news/industry-update-summer-2018/

It goes without saying that you need to do far more research than listening to or reading a quick overview of these companies before investing, but they are in essence simple business models to understand which I'm a great believer in. If it's a good enough rule for Warren Buffett then it's good enough for me. ;-)

Here's one I haven't mentioned before. The company in question is Immedia (IME).

I've struggled a bit with an investment here. It's a micro-cap and has possibly the most illiquid company shares I've ever dealt in. It's market cap. is around £4m and it has next to zero debt. I'm expecting the Interim results around the end of September. In keeping with the rest of this blog, here's a brief summary of the company by CEO Bruno Brookes (yes that Bruno Brookes ex-R1 DJ - yikes!! ;) :-

https://www.insider-trends.com/music-as-a-media-opportunity-immedia-on-why-brands-can-use-audio-to-reach-their-audiences/

When I say that I've struggled a bit with an investment here, I mean I've kept falling in and out of love with the company. More by luck than judgement I've had a successful run trading the shares whilst keeping a decent holding to run for the long term (I wasn't intending to trade but just kept changing my mind about company prospects). I've made 112%, 32% and 16% respectively. Indecision has proven to be lucrative in this instance.

Results for the full year 2017 were frankly horrible, but 2018 looks far brighter for a £4m minnow. Here's the outlook statement:-

https://uk.advfn.com/stock-market/london/immedia-broadcasting-IME/share-news/Immedia-Group-PLC-Final-Results-for-the-year-ended/77179409

"2018 has started very positively for the Group. The recent announcement of a substantial installation rollout in branches of a major UK financial institution is just one of numerous new business opportunities currently in play.

Our collective knowledge and skills-set have underpinned our ability to integrate, consolidate and strengthen the Group's product and service offering which, by the 2017 year-end, has also afforded us greater marketing and client opportunities in our key target sectors.

The confidence referred to at the start of this statement is palpable within the business and reflected in the amount and quality of work accomplished by all the team in both Aberdeen and Newbury. I would like to thank each and every one of them." 

I do recommend that you read the whole report.

I'm currently feeling very optimistic about 2018 for Immedia, and added to my core holding at prices around 22p. Being a long term investor at heart, I shall now hopefully hold on until this becomes a multi-bagger (fingers crossed anyway!)

A few extra points of interest include:-

1) In 2016 they acquired a company called AVC Media which took a while to bed in, but may now be starting to bear fruit

2) They own 6,000,000 shares in AudioBoom (BOOM).

and also from the 2017 report they say:-

3)
     a) Costs have been optimised to the size of the business, with c.GBP250k of annual cost removed

     b) The Group remains virtually debt free and is now cash generative

     c) Having launched in late 2017 our new engagement platform DreamStream X, interest levels in            Immedia's products and services are exceptionally high and point to a much-improved financial         performance in 2018 compared to the disappointing results in 2017 

As ever please do thorough research, and this is just a personal blog which reports my own thoughts and ideas. Good luck.

Exciting prospects but with added risk

OMIP (One Media IP) is not a company I've written about before on my blog, but I have briefly commented on ADVFN.

https://uk.advfn.com/forum/search?q=michaelmouse&post_poster=on&post_post=on&index=posts&thread_id=28458514

I bought into this micro-cap at prices around 3.5p, and took my original stake off the table when the share price doubled in a very short time frame. I've left the profit to run for the long term. The re-rating was chiefly due to a return to profitability and cash flow generation and significantly aided by "so-called" heavyweights Michael Grade and Ian Dunleavy joining the board of Directors.

The company appealed to me because of it's lowly valuation at the time, alongside it's past ability to generate healthy profits, cash flow and pay a dividend. It was also debt free. All the signs were that after a temporary hiatus OMIP was returning to growth which has now been confirmed by recent results. A lovely, overlooked little company in other words. I took out my original stake after the share price had doubled simply because I couldn't see how they could significantly ramp up growth without a larger war chest.

All that changed yesterday with an over subscribed fund raise and debt financing which will enable the company to acquire the rights to more valuable music catalogues that they can then monetise.

https://uk.advfn.com/stock-market/london/one-media-OMIP/share-news/One-Media-iP-Group-Plc-Proposed-Fundraise-of-a-min/78169362

https://uk.advfn.com/stock-market/london/one-media-OMIP/share-news/One-Media-iP-Group-Plc-Results-of-the-Placing-and/78174779

This is an exciting development, although with added risk because of the debt funding. However, with the expertise they have available, I can imagine that any purchases will be very prudent and have the potential to significantly enhance earnings in future. It's also worth keeping your eye on their TCAT services sales which are used to monitor music conflicts and potential copyright infringements. Sales are in their infancy but there is excellent potential here also. The placing price of 6p announced yesterday was disappointing but only in the context of the recent share price, and my remaining holding is still 82% in profit and a "free" ride. OMIP will now be a very long term hold for me, and will hopefully offer significant upside from here, but as ever DYOR.

Is 7digital's partnership with SoundHound the game-changer?

I've mentioned 7digital's partnership with SoundHound a number of times in the last few months on the ADVFN thread e.g.

https://uk.advfn.com/cmn/fbb/thread.php3?id=32540870&from=3208#firstpost

http://about.7digital.com/news/7digital-partners-soundhound-inc

Essentially they provide a voice first AI interface which can be white labelled for sectors like automotive, IoT, consumer products and enterprise services.

For those interested in 7digital (7digital and SoundHound Inc. are developing digital music solutions for customers around the world), it's worth a minute or two reading this article:-

https://www.forbes.com/sites/johnkoetsier/2018/05/03/build-your-own-alexa-soundhound-just-got-100m-from-tencent-to-give-every-brand-an-ai-driven-voice/#65298a5f4048

The list of SoundHound's backers and clients give some idea of the possible scale of the opportunity for their technology, but also for 7digital.

Interestingly, the article says, "If Walmart decided it needed an Alexa competitor to meet Amazon head-on, SoundHound could help."

Now who else has mentioned Walmart in recent interviews? Well 7digital's very own Simon Cole.

This could get very interesting hopefully, but as ever it's important to do your own research.