Diversifying is Key for Canadian Public Companies

Steve Kanaval  |

Vancouver based MPH Ventures (MPS.V) stepped out of the single revenue stream into an obvious area of opportunity when in 2014 it acquired a 20% equity interest in Travelucion (for the issuance of 4,000,000 MPH Venture shares and $100,000 in cash). MPH Ventures has a further 8-month option to acquire the remaining 80% interest in Travelucion, for a total of 100% interest, and the issuance of a further 16,000,000 MPH Venture shares.

In a recent update, the company talked about where they are with the project in an update to shareholders that included a year-end review of the Company`s activities in 2015, as well as providing guidance on its plans for 2016.

Jim Pettit, President and CEO of MPH Ventures (OTCBB: MPSFF), stated: "Travel restrictions that make it difficult for most Americans to visit the Caribbean island remain in place but new rules put in place by President Obama has made it much easier for permitted Americans to visit Cuba than it has been for the last half-century. We believe there is a great opportunity in buying a profitable company already doing business focused on Cuba, growing the existing Cuban travel business and website platform, positioning the company for more success when the U.S. lifts the tourist travel restrictions and ultimately the embargo, and capturing a share of the huge potential increase in interest and tourism to Cuba over the coming years. Tourism to Cuba is multi-billion dollar industry and is growing rapidly with American visitors already up 36% since Obama`s announcement a year ago. MPH as a Canadian company is uniquely positioned to tap into a multi-billion dollar industry poised for significant growth as more Americans travel to Cuba yet American travel companies are prohibited from operating in Cuba and servicing this market until the embargo is lifted."

MPH (Frankfurt: IJA2) started the year by announcing the appointment of Mr. Steve Marshall to its Cuban Investment Advisory Board. Mr. Marshall spent 11 years in Cuba specializing in Cuban joint ventures and successfully founded a number of companies.

Keep in mind these are lower valuation thinly traded shares with lower liquidity. They undoubtedly will spend time in 2016 telling the story, but the metrics need to come out in revenue in 2016, and I believe this deal is structured whereas (to buy the remaining 80%) the company needs to start performing on the revenue side of the balance sheet. This will certainly bring liquidity and share price appreciation and in turn a higher valuation than the current.

Travelucion owns Cuban focused web assets, through 432 sites, which collectively generate over 30 million page-views per year and direct traffic to the main Travelucion booking site. These web properties have been promoting Cuba and offering online travel services to the Caribbean nation since 1995, covering Cuban Culture, tourists' destinations, hotels and resorts.

The Cuba chase began to get in full gear in 2015 as President Obama began important steps to normalize relations. As a Tampa resident, I have continue to see great interest in Cuba. Tampa has a wonderful community and a base of great wealth steeped in Cuban heritage. I believe it will take a bit for MPH to gain traction, but I like the thinking and look forward to sitting down with C-Level at the company, and learn more about their business.

For the moment, it is with great pleasure that I get to learn about Canadian companies, and it is a quick easy trip from our Los Angeles offices, as Canadian public shells are shaking out and preparing for the unknown slide that may lie ahead. Good companies do this by diversifying revenue opportunities. Resources, metals, and mining have taken it on the chin, and no one knows how long it will be before markets turn, or return to profitability and stability.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer



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