Cliff Note #96 [Full Update] Recurring Revenue Has Inflected This Rare Small Cap Turnaround With $4 Billion In Revenue

The fifth infrastructure stock added to the MS Microcap Quality index (MSMqi)

Industry: Infrastructure

Multi-bagger themes uncovered in this post: GARP - Deep Value - Turnaround - Increased Visibility - Dividend - Strong Earning Power Ranking - Trending Industries - New Recurring Revenue Streams 

Cliff Note #96 is finally ready!

On August 1st, we published our quick pitch on why we added this Canadian infrastructure stock to our MS Microcap Quality Index (MSMqi). You can see that here. These quick pitches, or what we like to call Cliff Note Briefs, allow us to bring you into our research pipeline as soon as we think we’ve found an interesting idea.

We have now published the entire Cliff Note. Thank you for your patience.

We think this severely undervalued company is on the cusp of an inflection point, where it will start reporting a string of consecutive profitable quarters for at least the next two years. This comes on the heels of two years of losses, so the stock is not yet on the radar list of the “crowd.”

More importantly, the company has tweaked its business plan to generate more recurring revenue and to aggressively penetrate the United States, where federal and state budgets are releasing billions of dollars towards modernizing infrastructure. Currently, U.S. sales represent less than 5% of the company’s total revenue.

Cliff Note #96 is the fifth infrastructure stock added to the MSMqi.

We have loved the infrastructure theme for almost a decade and like it for many more years as the United States, Canada, and foreign nations, like the Middle East, start getting more aggressive at upgrading infrastructure across many industries.

Not only is infrastructure buildout getting billions of dollars of government funding support, but many of the companies that operate in this industry are beginning to develop more predictable and recurring revenue streams. This is the case with Cliff note #96.

To put into perspective why we love the infrastructure theme, at GeoInvesting (a microcap research platform I founded in 2007), we created an infrastructure screen in 2012, although most of stocks were added after 2016, including six in 2024.

Here are some screen stats;

• On average (of 25 stocks in total), the stocks are up 240% and reached an average peak return of over 325%.

• The 2024 additions are, on average, up 21.05% with an average peak return of over 55%.

Now, onto the entire Cliff note #96.