Opportunity: August 2024

This Company Has Re-Organized Itself Into a Cash Flow Machine

Introduction 

This month’s Opportunity Report features a small-cap company that has dramatically reinvented its business model from legacy print and services operations (where it would receive a one-time fee for products sold/services rendered) into a SaaS-like recurring revenue subscription model today. Coinciding with that transition, its revenue predictability and profit margins have materially improved and there is still room for further progress on those fronts. Buying equity securities at attractive valuations is a common habit shared among many highly successful investors. While we believe the following name fits the bill (trading at a compelling valuation compared to its abundant cash flow), we are not the only ones: the company itself has not shied away from opportunistically buying its own shares, occasionally in large quantities, and has made meaningful repurchases in recent quarters. Moreover, the Company’s board recently authorized a significant new repurchase authorization.