About a year ago, we flagged a company in our Research Journal, the pipeline of names we are actively watching, instead of promoting it straight into the Microcap Quality Index. In hindsight, this one probably belonged in the Index from the start. So this week we are correcting that and making the full case for why it earns a spot.
This week’s name is one most microcap investors already recognize. Under a CEO who took over in 2023, its core segment has quietly transformed from a thin-margin, stop-and-start business into a high-margin growth engine. Operating margins have gone from near break-even to over 30%, and backlog is at a record. It also runs a small, fast-growing defense unit that makes firing-control electronics for military guns, and insiders have been buying the whole way up. Even after a strong run, it still trades around 12x run-rate earnings. The full breakdown is below.