Here's CIBC's report from yesterday. GLTA



Davis + Henderson Corp.

Management Meetings: Focus On Fintech

? D+H has been diversifying away from cheque supply programs (down from ~95% of revenue in 2005 to ~40% of revenue today) into fintech solutions. We expect the company will continue to use its cash flow (9.3% FCF yield) to make acquisitions, with a focus on SaaS fintech offerings.

? Mortgagebot is the growth driver, with 100 banks added post acquisition bringing the total to 1,100 bank clients. Near-term opportunities include organic sales (4,500 banks do not have web POS), platform expansion (one-stop web solution not just for mortgages) and tuck-ins.

? Management remains committed to the $1.24/share dividend yielding 6.3% (we estimate 60% payout in 2012) and the new NCIB provides another avenue to drive shareholder value. Balance sheet remains strong, 2x debt to EBITDA, with management targeting 1.75x to 1.85x.

? D+H is currently trading at 8.0x forward EBITDA vs. peers at 7.7x, in line with the historical average. With exposure to SaaS, which represents 16% of 2013E EBITDA, we believe the stock should be trading closer to 9.0x. We increase our PT to $23.00 (prior $21.00) and maintain our SP rating