QAD: Value-Accretive Business Model Transition Gains Momentum

Michael Morosi of MAPFRE AM presented his in-depth investment thesis on QAD Inc. (US: CADA) at Best Ideas 2019.

Thesis summary:

QAD’s value-accretive business model transition continues to gain momentum. The attractive financial attributes of the new model are increasingly evident in margin expansion and cash flow generation. Meanwhile, the organization maintains its customer-centric focus to retain existing customers and acquire new ones. 

Michael’s valuation of $950 million has multiple levers for upside, offers a 15-20% margin of safety, and should increase over time with continued growth in the subscription business.

Read Michael’s write-up on QAD.

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About the instructor:

Michael Morosi is an Equity Portfolio Manager at MAPFRE AM. He previously worked at Jetstream Capital, a global equity hedge fund, as an Equity Analyst and at Avondale Partners, an investment bank acquired by Hilliard Lyons, as a Senior Equity Research Analyst. Michael holds a Bachelor’s degree in Economics and Business from Kalamazoo College (USA) and is an Executive MBA candidate at IE Business School (Spain). Michael’s investment research has been cited in a variety of international media, including CNBC, The Wall Street Journal, Bloomberg, and The Financial Times. He has also served as a lecturer on financial markets and renewable energy at Vanderbilt University. In addition to his focus on global public equities, Michael has experience sourcing and executing investments in private equity and venture capital.