Pulse Data (PSD.to) Update

We recently had a chance to listen to Pulse Data's latest earnings, which can be accessed by clicking here.

As is evident from the presentation, investors are clearly not thrilled with the company's continued investment in the LiDAR business and management spent quite a bit of time outlining the plans and outlook for this subsidiary. As for us, we are equally dumbfounded by management's insistence on retaining this non-core business, whose economics are not all that attractive and take away resources from the core seismic-data business, which is highly profitable and has excellent long-term growth potential.

However, despite investor dissatisfaction with the results, we are not changing our outlook on PSD.to. With a 6% dividend yield and a very  attractive, niche seismic business, we remain bullish on PSD.to and do not believe there is much downside risk at current prices. On the other hand, if management disposes of the LiDAR business, as they have done with other non-performing businesses (e.g. Trango), the stock could move substantially higher as a pure seismic data company. 
Pulse (PSD.to) is clearly ripe for some sort of shareholder activisim, and we are surprised the company's institutional holders have not yet pressed management to unlock the value here. We imagine that shareholders are giving management a bit of more time to stabilize the LiDAR business before pressing for some sort sale.

Finally, investors should be aware that PSD.to and other seismic companies (i.e. SELA.ob) are now in the midst of their "slow" season. So one should not expect any meaningful upward movement in the shares until later this year or early next.

Please Note: We hold a position in Pulse Data, which we first recommended at C$3.10. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.