GlobalSCAPE is a ~$90 million market cap company (assuming all outstanding options are exercised) operating in the managed file transfer (MFT) software space. The company has a number of exceptional qualities, including a high margin, recurring revenue maintenance and support stream, a strong balance sheet, a history of exceptional growth, and sustainably high margins. Despite all this, there are some uncertainties relative to the longer term competitive positioning of the company. This, combined with recent accounting issues that are still unfolding, provide some uncertainty to the situation. Nevertheless, I believe that an adequate margin of safety is currently provided given the current FCF yield on EV of ~11%.
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About The Author: Bryan Wagman
Bryan Wagman is an undergraduate finance student in his final year of study at Bentley University. He has spent the past two summers interning in research roles for value-oriented investment firms, one a startup fund that ran a concentrated microcap strategy and the other a well-established fund with investments in the small-large cap spaces. He has written for the Manual of Ideas since mid-2016. Bryan is currently searching for a role as a research analyst at a value-oriented investment firm upon graduation in June 2018 and can be contacted at [email protected]
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