January 25, 2023

Voxtur Analytics (CVE:VXTR): What’s Behind Stock Price Surge and Future Business Strategy

Midas Letter
Midas Letter
Voxtur Analytics (CVE:VXTR): What's Behind Stock Price Surge and Future Business Strategy
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Today, we sit down with Gary Yeoman, Executive Chairman of Voxtur Analytics (CVE:VXTR, OTCMKTS:VXTRF) to discuss the recent stock price surge and the company’s future business strategy moving forward in 2023.

Yeoman shares insights on the factors driving the interest in the stock, including acquisitions and partnerships, as well as the company’s efforts to diversify and strengthen its offerings. He also addresses concerns about market pressures, the impact of rising interest rates, and how the company will deliver returns for shareholders at current valuations.

Company Bio:

Voxtur is a transformational real estate technology company that is redefining industry standards in a dynamic lending environment. The Company offers targeted data analytics to simplify tax solutions, property valuation and settlement services throughout the lending lifecycle for investors, lenders, government agencies and servicers. Voxtur’s proprietary data hub and workflow platforms more accurately and efficiently value assets, originate and service loans, securitize portfolios and evaluate tax assessments. The Company serves the property lending and property tax sectors, both public and private, in the United States and Canada.

Links & Resources:

Timestamps:

00:00 Voxtur Exec Chairman Gary Yeoman

00:51 Stock price surge

03:34 Equity raise valuations

05:25 Delivering returns for investors

09:26 Fed policy impact on revenues

11:07 Mortgage servicing rights

13:38 2023 outlook

Transcript

James West, Midas Letter CEO: Welcome back, everybody. Gary Voxtur joins me now. He’s the executive chairman of Voxtur Analytics trading on the TSX Venture under the symbol VXTR. Gary, welcome back.

Gary Yeoman, Voxtur Exec Chair: Thanks for having me.

James West: You bet. It’s been a while, Gary, and just seems like a serendipitous day to have you on the show. As your stock has basically doubled in price in the last two weeks, what is driving the interest in the stock currently after a big selloff in 2022?

Gary Yeoman: Well, I think the 2022 is I don’t want to actually feel like we’re special. I think that we weren’t the only ones that were kind of singled out to have that you know unceremoniously dropping of our share price and share value. As far as turning the stock around, listen, I know categorically that we’re significantly a better company today than what we were eight months ago when the stock was a $1.60. You know, we’ve acquired Blue Water we’ve perfected some more of our products, our service offerings, the diversity, the anti cyclicality are all things that made us a better company. However, I think that by and large, there is a lot of apprehension in the marketplace, anxiety in the marketplace. What has happening to interest rates they’ve doubled in the last six months.

And so it’s brought a whole bunch of anxiety and pause in the marketplace. And then we turn around and we say, oh, we signed a top service provider, top 20 service provider, a top 10 lender. We’ve we’ve you know, had senior people in our company buy shares inside our company the fact that positive changes are, are being made in spite of the calamity of recessionary, you know evidence that’s been taking place. I think people are looking for that. Yeah we have to take things into perspective. Yes, we have doubled over the last few weeks, but we’re still a long ways away from where we were. And given that I believe that we’re a much stronger, better company than we ever have been it leaves certainly a lot of B room for continued improvement, which will certainly strive for as, as as time goes on, notwithstanding that we, we still have exposure to this, to this market. It’s not frothy where we’ve brought in some anti cyclicality measures by participating in the secondary market, but we’re still having challenges. And that’s and, and I think that it’s important for everyone to understand that this is not a a time where everyone gets into triple digit growth when you’re trying to survive among all of the pressures that are going forward.

James West: Sure. So then you know, one of the things that stands out is the fact that your, you’re making these acquisitions using your company’s equity, but at a high premium to the trading price during the period during these transactions were done, the additional line of credit from BMO was done at a dollar share. And even the shares you are using to acquire bluewater seem to have an implied premium in up well above where the trading levels are. So does that indicate of a confidence in your business from these partners, especially the bmo, your financial provider?

Gary Yeoman: Yeah, I think that there’s no question about it. I mean, these are very senior experienced aware you know, individuals understanding that the market pressures are, are self-evident out there, and yet they in participating with us understand that there may be some highs and low as we go through this process, but they do believe in the company. They do believe in the strategy and the vision, and it’s a matter of allowing us the time to be able to introduce these products and execute on that. And so I think that there’s been some evidence of confidence that this will happen notwithstanding, I mean, is not blind faith and blind trust we’re certainly gonna have to stand up and, and attest to what we believe in. And, and I think that that will happen. It may not just be as robust as as what you always want it to be, but there’s no question that the needle is pointing in the right direction for us.

James West: Okay. So some might argue that as as an investor at the higher levels of the last two years, that the the possibility, the odds of a successful experience as an investor seem a little bit far off, and with the increasing overhang of the outstanding share capital does that make it harder for the company to return to normal? And does that negate the previous discussion about a consolidation of the company’s shares?

Gary Yeoman: So does it make it harder? Of course. It makes it harder, but, you know we just finished doing our own little study internally compared to our peers. And I don’t really want to get into peers. I think most people have discussed what they are in the past, and our peers have seen you know, from the time the Voxtur was created two years ago when we brought in the title business and became the, the company that we are today. I mean, our share price at that time was around 20 I guess around it varied between 16 and 20 cents, so we’ll call it 20 cents. So in the last two years, our prices doubled, share prices doubled I won’t say market cap because we got acquisitions. So of course our market cap should increase fully diluted today based on what we’re trading at, we’ve went from evaluation of about 16 million, which we were at, at the time that before Voxtur was you know, imminent and now fully diluted based on the number of shares if they were all exercise, where we’d be creating, you know you know, closer to 300 million today.

And so it’s, it’s a, it’s a wide swath of improvement over that time period. However I’m certainly cognizant and aware that some people did come in on raises that were a dollar right, or slightly north of a dollar. And so that’s not a good thing because I’ve always, we have always prided ourselves on delivering returns for our investors. And first and foremost, we’re here to represent the ambassador to do the right thing for the investors and to continue to grow. So all of the things that we talked about as far as getting onto the TSX and, and going forward with that, talking about a consolidation that bears some you know, it’s, it’s, it’s always a a challenge. How much should you consolidate? Because what you want is to be a liquid stock.

You want lots of liquidity, you want lots of opportunity to sell, and you know, in, and so you, you want to be in in that conversation and not be known as a liquid. Now as you know, when any bit of news, we’re trading at millions of shares a day, so I think anyone that wants to trade in their stock can, but ultimately at some point in time, there will be a consolidation. But I don’t believe believe it’ll be a consolidation and a drop in value. I think it’s a consolidation and an increase in value, because that will be precipitated by material event, whether it’s a ts xb combined with an acquisition combined with a major contract or, or a combination of all three or strategic investor where they put money into a company, but concurrently increase the value of our business know significantly. So all of those things potentially are on the table. And I, I think that what’s really, really important is we’re just gonna do the right thing for the shareholders, and we’re not going to panic. We’re going to do what an experienced and management team does do, and that is keep our eye on the prize or feet on the ground and not be influenced by by, by factors that we know in time will change.

James West: Sure. To what extent is Voxtur’s revenue impacted by Fed policy and how does that correlate to revenue?

Gary Yeoman: Well, it is impacted we haven’t released our fourth quarter yet. It’s it’s not robust. I don’t think that anyone is expecting robustness in this, in this marketplace. But we’re certainly not impacted the way our peers are from a from a a a an overall sales sales are not buoyant, but we think that first quarter is gonna be really good because we just brought, brought Bluewater on, which was our secondary subordinate marking marketplace that we now have an opportunity to participate in. Rates doubled significantly in that fourth quarter. And so there was a bit of a pause in that marketplace. So it didn’t come out of the shoot firing on all, all, all eight cylinders. But we are, we’re seeing signs that the default business is coming back.

There’s been an improvement there. We’re seeing some signs with respect to the secondary market and MSRs and lots of products starting to come back onto the marketplace. And so we think that, you know February, March are going to be signif significantly more robust. It’s also, at the time when you got us Thanksgiving, which people tend to take a bunch of time off and then followed up by Christmas, fourth quarters never known to be that that quarter that everyone rises to the tide on first quarter should be a lot better than fourth quarter. And we’re hoping that some of the, the things that are happening with the blue water business will start taking flight.

James West: What do you mean by MSR, just for clarity?

Gary Yeoman: Mortgage servicing rates. So essentially what happens when, when interest rates rise, what you’re seeing is a lack of originations of new mortgages taking place because you’re getting a slowdown in the marketplace. A you know, a a impact on pricing and certainly a material impact on on refinancing refinancings, their down close to 90% originations are off between 55 and 60%. They need the, the, the investment banks need the liquidity. And so what they do is they trade servicing rights to the banks servicing rights, your, your the administration of your mortgage payments to collect. And, and, and so why do banks want it? They, they develop a relationship with a client they get deposits into their account. And so that both are attractive to both entities.

And so it’s kind of an anti-cyclical opportunity for, for people to you know, to thrive in less than robust times. And for us as I said before not only trading on MSR rights whether it’s acting for the, for the buyer or the seller or both we’re also able to integrate all of Voxtur’s servicing offerings. So when people trade, let’s say a package of servicing rights, they can be 20,000 loans or whatever it is. Someone is going to be some type of authenticity and check values to make sure the values are, are more than the mortgages. You know, take an accounting though that the taxes are up to date so they’re not you know, walking into default situations get title reports because you’ve read in the paper lately that horror stories that are taking place with people trying to fraudulently take ownership they’re not entitled to. Although there’s a lot more to that story that we’ve read lately on, on what’s happened there. It was probably more of an inside job than it was a, a problem with the, the title companies. But it, but it does provide, you know a great marketplace. And for us to be able to integrate all of our service offerings and only have to deal with one you know, with one service provider is really, really important, easy and more affordable for our clients. Mm-Hmm.

James West: Okay. So then what’s the outlook for 2023 in terms of growth and revenue?

Gary Yeoman: Well there’s a couple of things that we need to do. I mean from a I, I think from a perspective of who we are as a company, I think that you’re gonna see the law firm, you know come to grips and clean up all the receivables that were outstanding. And that seemed to be an issue of contention of related party rele receivables. So I think that that will be cleaned up this quarter. I also think that there’s a movement of flood for Jim to be able to separate himself from the law firm, so that ultimately the one thing that you won’t see after the first quarter hopefully is anyone talking about related party, because all of those issues will be gone. And so there’ll be no noise that way.

No concerns about conflict of interest. And even though I know that things were handled very professionally very, you know independently we just need to get rid of that noise. And, and I think that Mr. Al Qureshi has done an admirable job in making sure that that happens. So that should be out of the way in, in, in the first quarter. So that’s one good thing. The second good thing is that, you know our attorney opinion letters is now starting to take traction. So we’re gonna start, you know seeing some revenue from the AOLs there Al Qureshi and his blue water plus the synergistic service offerings from that is going to improve. And so by and large, I mean, our tax business is strong and continuing to actually get stronger valuation is affected, but we’re hoping to give Al and that valuation business some secondary opportunities in the valuation side to help offset it.

His business won’t be affected by that 65% or whatever it is that you’re seeing with other you know appraisal management companies. It’ll be much more robust, but it won’t be buoyant compared to what he did in the in the third quarter. So I think that he’s gonna have a little bit more difficult time, but if there’s ever a, a better run business in the country, I don’t know where, cuz he’s, he’s just Broadway is just a phenomenal president and right on top of everything where, of everything. And we’re just trying to get him some more tools so that he can augment the secondary market with what he’s historically been doing.

James West: Okay. Gary, that’s an awesome update. We’re gonna leave it there for now cuz we’re outta time. But I do look forward to continuing this conversation in the future. Thanks for your time today. Yeah,

Gary Yeoman: Well thanks for having us.

James West: You bet. Bye for now.

Disclosure

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