Ahead of the herd: Spotting a Transformation into a Growth Company early

An unprofitable, cyclical company today, but with a strategy for expansion, it has the potential to transform into a high-margin, recurring revenue business

I always ask myself what kind of company the seller I am buying shares from sees today and what kind of company the potential buyer of my shares will see in the future.

Right now we are looking at:

• An unprofitable company serving a cyclical end market (O&G).

What we will look at if the thesis plays out:

• A growing, highly cash flow generative company with recurring revenue and high margins serving a much more stable and 10x larger end market.

If the thesis does not play out, the downside is protected as the company currently has 60% of its market cap in net cash.