Quick Rise Would Be No Surprise – Data Center Design and Support Company With Multibagger Potential

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Quick Rise Would Be No Surprise – Data Center Design and Support Company With Multibagger Potential

We are long shares of a company that caters to the needs of enterprises who build modern data centers and mission critical facilities. The company helps its customers design optimal building layouts. It also supplies them with equipment and recurring revenue services to efficiently operate and maintain their data centers.

This company entered our radar in June of 2017, when we briefly mentioned that we would start tracking it for our Premium Members.  We believed that restructuring efforts were about to boost the revenue and help the company reach consistent profitability. We also believed bullish comments from its Q1 2017 conference call transcripts went largely unnoticed, putting more astute investors at a clear advantage.

Many microcap companies do not generally attract a lot of investor participation, giving those who do participate a huge information edge. We recently interviewed the CEO and shared my notes with premium members in a comprehensive article.  At a P/E of 6 on our 2018 earnings per share (EPS) assumption, we think the stock is trading at a deep discount. Once investors become aware of this comeback story, we assume shares will rise quickly.

Potential Return – Short term, +100% ; Longer term Multi-bagger

Asset Class Common equity

Industry – Data center design and support


CatalystsRestructuring entering growth phase; Cleaned up balance sheet; Industry gaining traction; Growth about to become apparent


Market Cap –  Microcap

The company is at the end of a multi-year restructuring process where it is replacing its larger revenue base business with a higher margin business. This is why year over year, sales have been down over the last few quarters, but we believe this is about to change. On its recent Q3 2017 earnings conference call, management stated that it is still on track to move towards its goal of achieving a quarterly revenue run-rate of $5 million and is now targeting 2018 revenue to reach $20 million with 10% adjusted EBITDA margins.  Meeting these targets would translate to meaningful EPS growth for the upcoming year, but we believe the company’s guidance does not take into account some of the added growth initiatives management discussed on conference calls.

Furthermore, the company has the confidence of an insider who is a committed financier under terms that are favorable to both the company and its shareholders. This is something we love to see in the microcap world as it sets the company apart from others sporting similar market capitalizations.  Obviously, it’s something that does not happen very often, so we are not about to miss out. We are extremely excited about this company’s business prospects and upside for the stock.

This stock, as well as others that we identified to be potential Multi-baggers, can be found here.

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By | 2018-03-07T14:27:33+00:00 March 6th, 2018|GeoTeam Research, Hot Research, In Depth Research, Spotlight Research|0 Comments

About the Author:

GeoInvesting is an investment research boutique in Skippack, Pennsylvania The GeoTeam's focus is on providing high quality stock market research tools and in-depth due diligence on U.S. small and micro-cap equities and on Chinese companies trading in China and the U.S. We research long and short ideas, and are the leading research boutique charged with helping investors navigate the treacherous China equity universe with a paramount goal toand protect portfolios from frauds. Numerous notable media outlets have credited GEO We have been credited with exposing numerous fraudulent companies in China. We have built a reputation in the US small and micro-cap space as champions of transparency. On the long side, we have also developed a , with a knack for picking stocks that have the propensity to get acquired at attractive premiums to their current prices will be acquired. Our team is currently comprised of 13 analysts and traders, and 7 on-the-ground researchers in Mainland China.

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