A Small Business With Big Numbers

A Quiet Compounder at 6.9x earnings and 0.96x book value

Key Metrics:

• 6.9x earnings

• 0.96x book value

• +20% CAGR

• Share buybacks

I spent the last couple of weeks tirelessly digging through endless microcaps, looking at so many income statements, balance sheets, and 10-Ks, my eyes nearly turned as square as my monitor.

To many, that probably sounds boring. But let me be clear: it was incredibly exciting. It gave me a deep sense of fulfillment.

Every time I came across a stock that looked interesting, it sparked the same feeling you got as a kid when you opened a brand-new LEGO set, a fresh comic book, or booted up a new computer game. You know that feeling, almost indescribable, when you're about to spend hours exploring something new, hours packed by pure joy and fulfillment, just for it to fly by in what feels like minutes.

That’s exactly how I feel when I stumble across a microcap trading at 9x, 7x, or even 5x earnings. When I see growing revenues, rising margins, and a clean cash flow.

My fingers get excited, and I enter detective mode. My hands almost start to feel like tools of Sherlock Holmes.

That’s what happened this week, when I found two interesting value stocks. (By the way, a second write-up on a little Buffett-style net-net is also coming soon.)

The business I’m sharing with you today has been growing earnings at more than 20% annually over the past decade. It’s outperformed its peers and the broader market by a mile.

Right now, it’s trading at under 7x earnings, and is actively buying back shares.

This looks like one of the few real bargains left in today’s market.

Let’s dive in.