Record Numbers. Dirt Cheap Price.
5.5x earnings. 3.7x EV/EBIT. 0.70x book value.
Key Metrics:
5.5x earnings
3.7x EV/EBIT
0.70x Book
Net cash
People like to say the easy money is gone.
That the internet killed market inefficiencies.
That Buffett’s early results, when he was compounding at 50% buying obscure companies nobody had heard of, could never be replicated today.
I disagree.
The inefficiencies are still out there.
They are just hiding in the small and microcap space.
The space too small for major institutions, and where finding something requires a ton of work.
And a ton of tracking.
To get a real edge, you basically have to build yourself a universe of small stocks and follow them over time. Track new filings, changes in the business, or other shifts in the numbers.
That way you can react when a new piece of information enters the market.
That is how today’s stock became interesting to me.
I have had this company on my radar for quite a while. As part of my microcap universe.
It went through a rough patch in early 2024, when demand from one customer softened, but that is now behind them.
In fact, the business is in better shape today than before.
The company is now generating record revenue, record earnings, and record book value.
And yet the stock still trades at 5.5x earnings, 3.7x EV/EBIT, and 0.70x book value. With net cash on the balance sheet and operating leverage that is still building.
Let’s dig in.