Hidden gems #8; Software 60%+ upside

This European software company is trading at roughly 15/11x P/E and 3/4% dividend yield for 2024E/2026E, respectively

Characteristics:

• Business type: Software & IT services, the business has been shifting towards recurring software revenues which currently accounts for about half of the business

• Domicile: Europe

• Market cap: < USD 50m

• ADV: USD 0.05-0.10m

• Valuation: 15/11x P/E, 3/4% DY, 0.10x FAV/P

• Founder-owned & -operated: Yes, Founder/CEO owns 42%, other executives hold significant stakes as well

• Growth profile: hsd %, supplemented with acquisitions

• ROIC profile: 20%+

• FCF profile: Sound FCF generation

• Capital returns: 50% dividend payout policy mid-term

• Broker availability: DG, IB (including residents: US, C, Europe), S