Frontier Digital Ventures’ latest quarterly result was the best yet. The company’s annual revenue should exceed $50m, valuing the stock at 10x revenue.

That’s well below where we believe the stock should trade based on its current operating performance, potential, market leadership positions, increasing profitability, intelligently structured acquisitions, and agreements to potentially selling some businesses in two or three years. Not to mention the recent takeover offer for iCar Asia by Carsome, which would value Frontier at well above $2.

The highlight of Frontier’s quarterly report was the performance of the Pakistan businesses, Zameen and Pakwheels. Frontier’s share of their revenues in Australian dollars increased 51% and 107%, respectively, despite an 11% fall in the Pakistan rupee.

For the handful of portfolio businesses that haven’t reached breakeven yet, their combined losses were a measly $100k. That means there are no more businesses bleeding Frontier’s bank account, which still contains $19m after recent acquisitions including moving to 100% ownership of Morocco’s version of Carsales.com and Moteur and InfoCasas, as it consolidates the South American market.

The company’s focus in the year ahead will be on bedding down recent acquisitions, making sure every business under Frontier’s umbrella is benefiting from the group’s experience and maximizing the number of property transactions over which its websites take a clip. All of which requires skillful marketing, and incentivizing key staff.

We expect plenty of revenue growth in the years ahead, but it’s comforting that most businesses are now profitable or close to it. We’re increasing our recommended Buy price and hopefully, as Frontier’s portfolio businesses mature, we’ll be increasing the Sell price as well. SPECULATIVE BUY. – Intelligent Investor