With Nv5 Global, Inc. (NASDAQ:NVEE) trading near all-time highs at 21 times its IPO price of $6 in March 2013, it brings me back to a 2016 conversation I had with the company’s CEO, Dickerson Wright, live on The Everyday Investor, a radio podcast miniseries that I host in from time to time. Part of the conversation resulted in a very compelling notion that when management teams work together across multiple entities, good things can happen.
In Dickerson Wright’s case, the good things are quite obvious. Speaking on NVEE, he said:
“This is the second company that I have taken public through an IPO. The other one was US laboratories, and we were taken private by a very, very large European firm, in 2002. And we started NV5, with our same management team. And that’s the key thing in our service industry and engineering is to have the management teams [work] together.”
This resonated immensely with me, and immediately thought that this was a multibagger trait that you don’t see very often. But when you do, it’s a thing of beauty, especially if the teams hit on all the things we look for in tier 1 microcap companies.
The full clipped portion of the fuller conversation referenced above can be listened to below:
GeoInvesting’s foray with NVEE with respect to its inclusion in our Model Portfolios, although successful 2 times, ultimately landed in the category of “bittersweet”, since we had assigned a price target of $21.00 to the stock on February 9, 2015, which was at the time a 60% premium. Our exits in the Select Longs Disclosures Portfolio occurred in the low to high 20 dollar range, and we had been covering the stock years prior in the $13 to $14 dollar range. We obviously underestimated the company’s future.
By the way, if you are interested to learn more about our management interview style, which includes the 5 topics listed below, please go here:
- Topic 1: Understanding how management has handled adversity in the past
- Topic 2: Understanding the company’s kind of marketing strategy
- Topic 3: Insight into new product or service development
- Topic 4: Additional revenue opportunities from existing customers
- Topic 5: How well does the company understand its industry and competitors?
We are hot on the trail of more tier one microcap companies, and interviewing the management teams for more insights into executives’ histories and accomplishments gives us a definite edge, especially when it comes to the right questions to ask. Our members get to join us live in our Fireside Chats so they can witness first hand how we host the interviews and interact with management, so if you are not already a premium member, you might want to consider hopping in yourself to be among the first to hear Information Arbitrage when it occurs.