I’m going to show you today the single largest growth story in the junior markets—that you have never heard of. You don’t have to wait until tomorrow like usual. The symbol is half way down today’s story. But read this first:
This junior stock is the #1 growth stock I have ever seen—and they are anonymous. NOBODY knows them. And that’s probably why they trade at 7x gross profit vs. 53x (average of 8 companies) for peers both large and small. 7 vs. 53.
They are the AMAZON, the NETFLIX of their industry. That is not hyperbole, as you will read below.
And I’m bringing this story to you NOW, because they are about to flip the switch on profitability, after spending years to become the overwhelming dominant player in their business. And the woman who runs it all is amazing.
Both Amazon and Netflix made themselves indispensable to us all by being convenient and cheap for years.
They grew market share steadily—losing money the whole way. But when they hit critical mass, and just raised prices a teeny weeny bit—look what happened to net income:
It is hard to believe that as recently as 2015 Amazon was making zero dollars of profits. Then Jeff Bezos decided it was time to monetize that huge customer base…and now the company is earning $21 billion a year and still growing.
Netflix just started raising prices ever so slowly. $1 a month one year, another one a bit later—then the $3/month last year!
That’s what this junior company has done—become dominant. You’ve never heard of my #1 junior growth stock because it achieved near total market dominance in its market as a subsidiary of a big company. But it was just spun out into a small public vehicle last fall.
And here’s what they’ve done:
They have the second largest video property worldwide in terms of unique viewers. Not the second largest in this niche—the second largest out of every company on the planet.
They have more than 600 million unique monthly viewers generating over 470 b-b-billion views of their content in FY 20.
470 billion views ——think of the leverage that having an audience that big creates. This junior stock owns all their content and always will. When your unit volume is 470 billion—you only have to raise prices a teeny bit to make A LOT of money.
And media-tech company BBTV Holdings Inc. (BBTV-TSX, OTCMKTS:BBTVF) is just now ready to leverage that volume with a higher priced premium service that will make both customers and investors VERY happy.
Newly public, it’s trading at just 7x gross profit, vs 53x for similar online stocks like Fiverr (FVRR-NYSE) at 53x gross profit, and 49x for The Trade Desk (TTD-NYSE). There are even more highly valued online stocks–as high as 127x! BBTV trades at 7x gross profit.
BBTV – 2nd Largest Video Property in the World
BBTV is so big…that when CEO Shahrzad Rafati told me, I literally DID NOT BELIEVE HER.
As a small-cap investor, I can hardly imagine 470 billion anything. BBTV is actually amongst the mega-cap technology giants.
BBTV’s tech platform allows influencers to grow their audience and drive revenue on YouTube, Instagram, TikTok, Facebook, and Snapchat among others.
BBTV shares in the advertising revenue earned by the influencers. The bigger the audience, the bigger the advertising revenue. BBTV doesn’t just provide the solutions though—it also acquires the rights to the content.
That means platforms like YouTube, and Instagram are relying on BBTV to entertain and engage with their audiences.
The “influencer” economy is massive now—and still growing! BBTV is the lynchpin between influencers, audiences and the groups who make them money—like advertisers.
With BBTV’s solutions, influencers increase their audience and revenue. BBTV helps them get their content discovered and helps them monetize it.
The platforms like YouTube or Facebook that host the content also benefit from BBTV’s involvement because BBTV provides a massive library of content as well as technology to help increase viewership and engagement. So everybody wins: influencer, platform and BBTV.
Now the staggering numbers……BBTV hasn’t just captured a few influencers. The company is DOMINATING.
This is a great baseline for massive monetization. I’m about to tell you how they’re going to do that.
But more incredible numbers——BBTV’s audience watches more than 2X the minutes of entertainment than the major media companies. That means BBTV has more than twice the minutes of viewership than the likes of Disney (DIS-NYSE; US$332 B market cap), Warner Media , Comcast (CMCSA-NASD; US$240 B market cap) and Viacom & CBS (VIAC-NASD; US$35 B market cap)
There’s HUGE value to advertisers in a scale that large.
These are world juggernauts and BBTV has built something of a scale that is bigger—and it is still growing. Americans now spend a quarter of the day with digital media and the pandemic has only increased that time. You know what happens when demand increases? Ad rates go UP!
BBTV has ingrained itself in more of the audience that watch this content than anyone but Google.
BBTV has a market cap of CAD$200 MMMMM-illion. Or $0.2 billion. ZERO point two billion. (US ZERO point one seven!) There’s only 20.5 million shares—that is BIG leverage to any increase in profitability.
The Moat Value
Is The Most Value
BBTV’s huge platform scale creates a moat around its business. Just as Google won the search race, BBTV has captured its video influencer business.
Nobody else can match the data, and the targeting that goes along with it, from the 2.6 billion videos that BBTV now has in its database.
Nobody else can provide BBTV’s value to their influencer customers.
That’s why the NBA has leveraged BBTV’s solutions since 2009. Now, the NBA is already big. But with BBTV, the NBA’s viewership has still exploded upwards by 3900% through 2019.
That shows the power of the moat; the value of the BBTV tech.
Think like this—what Shopify is to retailers—BBTV is to influencers. The influencers just focus on what they enjoy and want to do which is creating the content.
BBTV is a one stop shop for influencers so they don’t have to juggle working with 6 or 7 different vendors. And they make more money: on average an influencer earns 19% more with BBTV’s solutions. And when you deliver results, customers stay with you. BBTV retains 95% of views year over year.
PLUS Program Turns up the Dial on Profits
Since 2005, BBTV has had ONE goal: GET HUGE. This is STEP 1 of the standard tech business plan. 470 billion views–mission accomplished. BBTV has achieved an absurd level of scale.
Revenue in 2019 hit $372 million—up 55% in just two years. Through 2020 growth has continued—Q4 revenue up 40% year on year, and fiscal revenue up 23%.
But now is when the company really puts the pedal to the medal. It is time to turn the dial on revenue and profitability.
As it should be, the content creators get most of the dollars for their work. And BBTV’s margins are still incredible! For the full fiscal year 2020, BBTV Share of revenue was $39 million. Gross profit was $36 million–how many companies have a 93% gross margin?
BBTV has two solutions: Base and Plus. Base Solution drives viewership and increases ad volume for influencers while Plus Solutions increase and activates additional revenues streams. There are three Plus Solutions: Direct Advertising, Content Management and Mobile Games.
BBTV is now focused on ramping up its “Plus” solutions for influencers. This is a step change in gross margins for the business……
With incredible data over a huge viewership, they can offer BIG advertisers a much more targeted audience. And that is worth A LOT more money—like, FIVE TIMES more! Again, this is win-win-win for the influencer, the platform and BBTV.
Not only you can monetize your content with BBTV but you can also monetize all fan uploaded content through their Plus Solutions. Think of a fan taking either a concert or sports highlight and uploading it—BBTV can actually create revenue out of that for the influencer that owns the clip—by placing relevant ads against that video—that’s not only more fair, but lucrative!!)
BBTV’s PLUS can create mobile apps—just like Disney does for its major IP—and further monetize the influencer’s audience. THIS. IS. HUGE. And it’s just starting now.
BBTV surrounds their customers’ content with other great content and revenue streams—and it snowballs—sometimes VERY FAST.
Right now, Plus Solutions are just 10% of revenue—but 25% of gross profit. Increasing Plus Solutions across 470 billion views—and hey, I haven’t told you that they are just starting in regions like China and India and Japan and South Korea—the scale for increased profitability is…well, honestly it’s hard for me to fathom. It’s very big.
INTERNATIONAL MARKETS GAINING MORE TRACTION
BBTV has just barely tapped into the billions of influencers in international markets who don’t have a similar solution. BBTV’s platform will work perfectly there—the tech is language and domain agnostic, and works just as well in international markets as it does in North America.
Seriously—there is a lot of upside here if this team can execute. Just to be clear, 470 billion views is pretty good execution.
Plus Solutions just started. I think it is going to have a game-changing impact on the bottom line as more influencers reap the benefits. Traction is great! Direct Advertising Sales growth rate almost doubled going into Q4’20 where revenues grew by 57% year-over-year.
Jeff Bezos flipped that switch to profitability for Amazon in 2015 after 15 years of growth. BBTV is similarly doing it now after an incredible stretch of growth from 2005. Investors got to miss over a decade of unprofitable growth when BBTV was private.
Newly public—with WELL Health CEO Hamed Shahbazi on the board—investors now get to see what happens when a small-cap company with INCREDIBLE leverage (on par with Google, Facebook) actually starts trying to make money. And it’s starting from a very low valuation compared to its peer group (7 vs 53, remember?).
I told you it was the #1 growth stock you’ve never heard of. It could be an Amazon, er, I mean, amazing story in 2021. BBTV-TSX, OTCMKTS:BBTVF. I’m long.
BBTV has reviewed and sponsored this article. The information in this newsletter does not constitute an offer to sell or a solicitation of an offer to buy any securities of a corporation or entity, including U.S. Traded Securities or U.S. Quoted Securities, in the United States or to U.S. Persons. Securities may not be offered or sold in the United States except in compliance with the registration requirements of the Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom. Any public offering of securities in the United States may only be made by means of a prospectus containing detailed information about the corporation or entity and its management as well as financial statements. No securities regulatory authority in the United States has either approved or disapproved of the contents of any newsletter.
Keith Schaefer is not registered with the United States Securities and Exchange Commission (the “SEC”): as a “broker-dealer” under the Exchange Act, as an “investment adviser” under the Investment Advisers Act of 1940, or in any other capacity. He is also not registered with any state securities commission or authority as a broker-dealer or investment advisor or in any other capacity.