This nanocap special sit is worth looking at
$7m market cap, no IR, 5.7 P/E, inflection to growth while priced at 22% FCF yield, subsidiary valued at 3x EV.
I don’t usually write about companies this small, but I figured I’d have some fun this time.
This stock is so small that the market is unable to properly price its hinted return to growth.
I have found a $7m market cap telecom company that operates in segments with an expected 15-30% 5-year CAGR and is now poised to capitalise on that after a successful restructuring (reduced net debt by 86%).
The company has announced that they have entered the United States market (in which deregulation of the telecommunications industry serves as a significant tailwind) with a $1 million contract already in place. It looks to be just the beginning with substantial growth ahead.
Finally, they have released a revenue outlook of $45 million for 2030 (7 times its current market cap, with an implied 17% CAGR).
Nevertheless, the stock is cheap in every way you can think of: 5.8 P/E, 22% FCF yield, 0.4 EV/Sales, etc.
The downside seems limited, as the company just had one of its subsidiaries valued at 3x the company’s enterprise value by a third-party accountant and business advisory firm.
The approximate 5-year IRR comes out to around 45%.
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