Kreuzmann’s Ideas

Kreuzmann’s Ideas

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Kreuzmann’s Ideas
Kreuzmann’s Ideas
Tiny OTC Company trading at 2x FCF and growing sales 20% YoY

Tiny OTC Company trading at 2x FCF and growing sales 20% YoY

Research report on a company from my A-Z list

Jakub Kreuzmann's avatar
Jakub Kreuzmann
May 25, 2025
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Kreuzmann’s Ideas
Kreuzmann’s Ideas
Tiny OTC Company trading at 2x FCF and growing sales 20% YoY
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Hi,

And welcome to my new write-up. Generally I like growing quality businesses at cheap valuations. That is the main part of my portfolio. Companies like PharmX, Shelly, Haypp, Intellego, Connexion, Sofwave, that can scale and have numerous options to grow.

But then I am also attracted to stuff that is maybe not the high quality but it is just too cheap to ignore like Ignite, TSR and Sodi… And I think the company I highlight today is just too cheap.

During my time going through all OTC stocks, I have found tiny, profitable company in an industry I would normally passed on because of lack of differentiation and terrible economics. However, this small company actually benefits high competition and found interesting niche. Altough I am not convinced of strong moat, this little technology company grew sales in all but one year during the last decade and recently became profitable and now trades at 2x EV/FCF.

Summary of this investment

  • $ 1.9 million market cap

  • Revenue is growing 20% a year while shares are trading at 2x EV/FCF

  • Inflection in profits from negative EBIT margins last year to 14% in latest quarter

  • Amortisation hides a real economic profitability which soon will be seen

  • The company has significant NOLs, making tax shield larger than the whole market cap

  • Led by founders who own 25% of shares who are focused on keeping costs lean

  • The company is significantly reducing debt

  • No dilution in the last 4 years

  • Extremely underfollowed and written up for the first time

  • Higher risk because of debt and stronger competitor

Let me introduce you this company.

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