Wednesday, September 14, 2016

Reasons I Own IDI / Cogint ( $IDI $COGT )

I was recently asked to list some of the top reasons I own IDI (now Cogint) (ticker: IDI) (new ticker: COGT). Here's a shorter version of what I said:
  • IDI / Cogint’s current management team built 2 previous companies in the same business over the last 15 years and delivered substantial exits (Reed Elsevier, TransUnion).
  • The products they previously built and sold currently generate ~$1.5 billion in annual revenue.
  • Management has now reunited at IDI / Cogint and recently rolled out a far superior, cheaper product that is highly scalable. They expect it'll deliver similarly high margins.
  • Management is much more ambitious this time than their previous 2 exits. Their current addressable market is $20b and growing fast. Management sees IDI / Cogint growing to a billion-dollar company "in short order".
  • IDI / Cogint’s business involves creating actionable intelligence out of disparate pieces of data. The 3 addressable markets for their data fusion product: (1) Consumer marketing, (2) Custom analytics, and (3) Risk management.
  • The only pure play comparable is privately-held Palantir which recently raised funding at a $20 billion valuation. IDI’s current market cap is ~$250 million.
  • IDI / Cogint’s largest shareholder is multi-billionaire Dr. Phil Frost who’s currently CEO of publicly held Opko Health (OPK). He owns 30%+ of IDI and continues to make open market purchases. I’m told he doesn’t invest in anything that doesn’t have the potential to make him at least $1b. He sizes this opportunity at $1b+.
That said, I encourage you to read the following key blog posts:
  • Roth Investor Conference transcript (LINK)
  • Interview with CEO Derek Dubner: (LINK)
  • Interview with Executive Chairman Mike Brauser: (LINK)
More IDI analysis HERE.

Disclosure: Long

NOTE: I have no formal relationship with any company discussed here nor do I receive any compensation from them.

This website is published for informational purposes only and does not provide investment advice, nor is it an offer or solicitation of any kind to buy or sell any securities and/or investment products. In the event I invested in a featured security or investment product, an acknowledgment will be made. All opinions expressed are my own.

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