Pivot Technology Solutions (TSXV:PTG) is a multi-vendor solutions provider with huge upside, says Cantor Fitzgerald Canada analyst Ralph Garcea.
In a research report to clients this morning, Garcea initiated coverage of Pivot Technology with a “Buy” rating and one year target of $1.25, implying a return of 297% at the time of publication.
Pivot was founded by Gord McMillan, Shane Maine and former Apple CEO and Pepsi president, John Sculley. The company acquired four Value Added Resellers (VARS) between 2010 and 2012, with the goal of consolidating the fragmented enterprise IT VAR space. It then listed on the TSXV in 2013.
Garcea says he likes the fact that Pivot sells high margin products, that it has proven execution and integration capability, and the fact that the company is generating enough free cash flow to support both a share buyback and a dividend. He notes that Pivot is positioned at the high end of the market, with 70% of its revenue coming from Fortune 100 companies.
“Having acquired sufficient scale and capital raising ability to truly be a consolidator, Pivot is uniquely positioned amongst U.S. VARs to respond to the numerous dynamics affecting the IT supply chain, including consolidation in end user markets, evolution in mobile, big data and enterprise computing, and the advent of the post-PC era,” said Garcea.