Armada Data – Small Book, Big Potential

It should be noted that because this update is occurring “off cycle”, we will not be delving into the typical analysis of the balance sheet, income statement, or cash flow statement. This article deals specifically with the Armada press release of January 20th, 2021. Armada should be issuing Q2 financials later this week or in early February, so we will engage in a more fulsome analysis of results at that time. For those that are interested, our initial review of Armada can be found here.

On January 20th, 2021, Armada (ARD.TSXV) issued a press release, in which the company announced that Armada had just released an e-book, aptly entitled “The Road to the Deal”. The intent of the book, as per the press release is to “….take away the fear and anxiety associated with buying a new car or truck. Along the way, we (Armada) discovered that removing the ‘mystery’ from the process benefits both buyers AND sellers, in that more vehicles are sold and long-term relationships are established.”

When I read this press release, I initially thought this was just another self-congratulatory press release that is typical in the small cap market. As I have mentioned in other articles, press releases are sometimes used in lieu of “real results”, and much of the time, they simply stoke investor imagination – and share price. But later that same day, I thought about it a bit more, and decided I was wrong. The share price was actually lower (after the press release) than it was earlier this month, and the more I thought about it, the more I came to the conclusion that this press release is worth talking about. Bear with me as I walk through the reasons why….

Armada is actually engaged with their shareholders. In one of our recent posts, I highlighted one of the reasons why I continue to invest in the volatile small and microcap sector. In “10 reasons why I bother…”, number 3 on the list was the fact that small and microcap CEOs will actually return your calls and emails. Keep in mind, not every company is the same, and some smaller companies could care less, but generally speaking, they are more likely to do so. When I read the Armada press release, it raised some questions – so I asked. The fact that I got a response wasn’t what was interesting, it was the speed at which it occurred. I received a full response to all my questions in less than 24 hours, and a clear indication that if there were more questions, the door was open. A willingness to clearly (and quickly) share information with shareholders in an “unfiltered” channel like a direct call or an email is a big deal. It is much easier for a company to issue a press release (or a promotional shareholder piece) and never take direct questions – it is much harder to be there at the behest of a shareholder and answer questions quickly and directly.

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Disclosure: I am long on Armada Data. 

I have no relationships with any of the companies profiled, other than normal communications with Investor Relations or Sr. Management of the companies ...

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Joel Santiago 4 weeks ago Member's comment

Nice, thanks.