KeyStone’s Stock Talk Show Episode 252. 

Happy B-lated mothers Day to all the mothers out there – my wife and mom and mother-in-law particularly!  To start the show I will hit the viewer mailbag to answer a question Pivotree Inc. (PVT:TSX-V), refers to itself as a leader in frictionless commerce, strategizes, designs, builds, and manages digital Commerce, Data Management, and Supply Chain solutions. A viewer asks what has led to the poor performance in the stock over the past year and essentially since it listed, despite strong growth. Aaron answers a viewer question on Enterprise Group Inc. (E:TSX), which provides specialized equipment and services in the build out of infrastructure for the energy, pipeline, and infrastructure construction industries. The stock has performed well over the past year, but operates with end customers that are cyclical in nature. Aaron will let you know if the growth can continue. Brett answers a viewer question on Western Investment Company (WI:TSX), a small but diversified private equity company which holds 4 private companies in its portfolio – the company has recently announced a focus on the Insurance segment and Brett examines the plan and current valuations.  Finally, Brennan answers a viewer question on Vitreous Glass (VCI:TSX-V), which the viewer states pays a juicy variable dividend but seems to be trading with a higher than historic PE ratio. He asks Brennan if the premium is warranted.

Let’s get to the show – we welcome my cohost, Mr. Aaron Dunn and the killer B’s, Brett, and Brennan.

Stock Price$121.00
Market Cap$45.21 M


What does Pivotree do?

The company refers to itself as a leader in frictionless commerce, strategizes, designs, builds, and manages digital Commerce, Data Management, and Supply Chain solutions.

Pivotree is essentially an end-to-end provider of e-commerce, supply chain, and Master Data Management (MDM) services to >180 large- and mid-market retailers, branded manufacturers, wholesalers, and distributors in North America. The company supports clients on digital strategy, platform design and build, implementation, and hosting through to ongoing support.

The viewer asks what has lead to the poor performance in the stock over the past year and essentially since it listed, despite strong growth?

Let’s look at the growth:

Revenues grew from $49.8 million in 2018 to $101.7 million in 2021. Operating profit fluctuated over that period but actually trended towards higher losses.

Revenue growth turned negative in 2023 and remains lower over the past 12-months coming in at $85.7 million on a trailing basis.

Let’s take a look at the most recent quarterly results….

Q1 FY 2024 Highlights

  • Total Revenue of $20.9 million decreased 16.4% (16.2% in constant currency.)
  • Total Managed & IP Solutions + Legacy Managed Services (MIPS + LMS) of $9.4 million, a decrease of 14.7%, or 14.6% in constant currency. The year-over-year decline was primarily the result of the reduction of Oracle customers as service ramps down, partially offset by upsell on existing customers and addition of new customers.
    • Managed & IP Solutions (MIPS) Revenue grew 38.0% to $4.0M in Q1 2024, from $2.9M in Q1 2023
    • Legacy Managed Services (LMS) Revenue declined 33.5% to $5.4M in Q1 2024, from $8.1M in Q1 2023.
  • Professional Services Revenue of $11.5 million, a decrease of 17.7%. The year-over-year decline was primarily due to ramp down of professional services projects, and delayed close of current pipeline deals, which was only partially mitigated with growth through existing and new customer bookings
  • Net loss of $2.2 million compared to net loss of $1.4 million for the prior year period primarily due to the timing of third party costs, and increased contractor spend to support growing professional services revenue which contributed to reduced gross profits.
  • Adjusted EBITDA of $0.2 million compared to an adjusted EBITDA1 of $0.9 million for the prior year period

Balance Sheet:


Cash: $7.9 Million.

Debt: $0.8 Million.

Net Cash: $7.1 Million



EV/revenue (TTM): 0.40

EV/aEBITDA (FY 2024e): 14x. (?)  – this seems like a very optimistic estimate.

PE (TTM): n/a  – no earnings, so no way to calculate a PE.

PE (FY 2024e): n/a  – not expecting earnings this year.



From our perspective, that about summarizes the story of Pivotree’s declining share price. While the company had experienced solid revenue growth, in the near-term, revenues are declining and the company has yet to post significant positive cash flow and certainly no earnings. Overtime, this leads to a lower share price, no matter what story you are telling to investors.

  • PVT’s shift to product is gaining momentum. The company generated $4.0 Million of Managed & IP Solutions (MIPS) revenue (+38% Y/Y) in Q1 and signed $2.9 million of MIPS bookings.
  • Ongoing LMS declines in 2024 should be increasingly balanced by growing MIPS contributions.
  • Consolidated revenue still expected to decline in 2024.

Vitreous Glass (VCI:TSX-V)

Slide #1

I would like to hear one of the flat land prairie boys, review micro-cap VCI (Vitreous Glass). Pays a juicy variable dividend. Seems to be trading at a higher than historic PE ratio. Is it warranted. Crushed glass, who wouldn’t like that.


Price: $5.22

Market Cap: $31.7 Million.

Company Description:

Vitreous Glass operates a waste glass processing plant in Airdrie, Alberta. The plant gathers post-consumer waste glass, crushes it, removes contaminants, and sells the final product to manufacturers of fiberglass building insulation for use as a raw material in their production facilities in Alberta.

Slide #2

Given the company sells its final product to just 3 manufacturers of fiberglass building insulation, the company has high customer concentration and sales are heavily dependent on housing starts in Western Canada and the Northwest United States.

And despite the lack of housing supply in Canada and the U.S., given the increase in interest rates, we have seen housing starts remaining relatively flat in early 2024 compared to Calendar 2023.

If we look back to 2021, during the year Vitreous announced that it experienced unexpected additional demand by its two main customers driven by an increase in housing starts in Canada and the U.S. And as indicated by the company, they stated that “the levels of supply of raw glass and the levels of demand by Vitreous’ customers will continue to fluctuate beyond the control of the company. These fluctuations are not susceptible to prediction or forecast by the company’s management.”

Slide #3

Looking at the financials, the last quarter was Q1 2024:

  • Revenue was down 20% to $2.34M.
  • EPS was down 18% to $0.09 per share.
  • CFO was a gain of $184K, down considerably from $781k for the same period last year.

And looking at the valuations, trailing twelve-month P/E is 13.7 times, and on a price-to-cash flow basis the stock trades at 12.3 times.

The trailing dividend payout ratio out of earnings is approximately 95%.

Slide #4

Historically, Virtreous has traded with a median trailing P/E multiple of about 12x, so it is currently above its historical valuation.

Slide #5

Looking at the balance sheet, it remains very healthy with $1.68M in net cash which equates to about $0.27 net cash per share. We do not see any real uses for the cash other than supporting the dividend, as you could see from the companies long term revenues, there has really been no growth in the business.

Slide #6

Overall, I think that Vitreous is an intriguing Micro-cap:

  • The company has an attractive Dividend Yield of 6.8% and a trailing payout ratio of 95%.
  • The balance sheet is healthy with Net Cash per Share of $0.27.
  • Revenue growth has been relatively stagnant with a CAGR of 2.5% from 2014-2023. And the company really has no long-term expansion plans.
  • The company’s current P/E of 13.7x is above its historical median P/E of 12.0x. I think for a company like this I would try to catch the stock on a dip, rather than a potential peak, given the unpredictable nature of demand for its recycled glass and the lack of growth expected from the business.
  • Risks that I would highlight for Vitreous is that its extremely illiquid, demand for its products can be quite volatile, and it has very high customer concentration with just 3 customers.
  • Investors with high risk tolerance looking for a “green” stock with an attractive yield could consider Vitreous Glass. But we continue to Monitor.


YSOT Western Investment Company WI:TSX


Western Investment Canada symbol WI on the TSXV is a diversified private equity company. The company has 4 private companies in its portfolio. Fortress Insurance Company, GlassMasters Autoglass, Golden Healthcare, Foothills Creamery. The stock currently trades $0.58 a share and has a $17.2 million market capitalization, offering a yield of 0.86%.


For companies structured like Western Investment the financials are generally structured a bit differently because they will report their share of income as equity investments which are not directly consolidated into their own financial statements.

For 2023, the company had $1.8 million in income from equity investments an increase of 46% from 2022. After the corporate expenses net income for Western Investment was $0.2 million.

To further break down the financials we need to look at the underlying companies.

Western Investment owns 55.3% of Glassmasters, 25-30% of Golden Healthcare, 49.5% of Foothills Creamery, and 28.5% of Fortress Insurance during 2023. Golden Healthcare’s range is because Western Investment holds 30% of 3 Saskatchewan senior care homes and then 25% of Holden Healthcare Management and then groups them for earnings.


The following figures are based on 100% of the underlying company which then to get Western Investment’s share you would multiply by the ownership percentage.

The majority of the company’s Net income comes from Glassmasters net income as well as a promissory note that can be continued perpetually. Together adding $1.9 million income. Notably growing the revenue for the business by 21.3% and effectively doubling the non-interest income.

Golden Healthcare had a net income of $115 thousand up from a slight loss in the prior year.

Foothills Creamery also performed well with Net income flipping to an income of $789 thousand from a loss of $1.8 million on the back of revenue growth of 8.3%

Last, but certainly not least Fortress Insurance, increased to a net income of $719 thousand from a loss of $383 thousand. Gross written premiums grew 26.4% to $22.4 million.


So overall a strong year for the four businesses across the board.


However, the company is undergoing a major change. The company is receiving atleast $20 million investment from Paul Rivett founder of of Tevir Capital Corp.  which could potentially be further increased to $23 million. In tandem the company is issuing rights, for existing shareholders to purchase shares at $0.40 a piece could add an additional $30.2 million in capital. Remember the market cap of the existing company is only $17.2 million so even if no rights are executed the investment just from Paul Rivett is larger.


In addition, Paul Rivett will become President and CEO, while former CEO Scott Tannas will be appointed to Chairman of the Board for 5 years.

Paul Rivett is interested in the Insurance side of the business and will become the focus of the business.


As well, the transaction required the company to acquire 51% of Fortress insurance and it has since secured 59% of shares conditional on closure of the Paul Rivett transaction. As a part of the potential acquisition of Fortress shares rights for Western Investment Shares as cash or voting shares at $0.40 a piece, which could potentially add another 30 million shares to Western’s count.

The company is planning to continue to hold the other businesses Golden Healthcare, Foothills Creamery and Glassmasters as long-term investments.

Further the company targets to grow Fortress’ gross premium written to $100 million annually by 2028, through both organic and inorganic growth, ergo acquisitions. Which is a very substantial increase from 2023s $22.4 million gross premiums written.


Concluding, the company is undergoing significant changes, to say the least. The trailing valuations are effectively meaningless given the complete capital structure change and shift in business model to focus on insurance, assuming the transaction closes.

While I would call it very likely given the progression of Fortress share count being secured, there is always albeit likely slim possibility the transaction falls out which is a major risk to any investment thesis.

I would like to see how the various parts of the transaction play out and if the capital is able to be effectively deployed to grow Fortress. As when you are trying to effectively 5x the size of a business in 5 years it does come with a lot of risks, so I would like to see a bit of progress before any potential commitment.  For now I would just monitor the company.


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