Rand Worldwide: Not A Microcap Anymore

• July 25, 2023
• Case Study, Education, Microcaps

$RWWI Is $ADSK’s top software reseller. The company reported revenue of $222 million for its year ending June 30, 2019 and was moderately profitable.

Today, annual revenues are tracking at $336 million, an increase of 51% vs. June 30, 2019 and annual earnings per share are tracking at $1.80, an increase of 374%. The stock currently trades at a market cap of $709 million, a 508% increase since growth began to inflect in early 2019.

One major factor set off this multibagger move that shows up time and time again in other multibaggers.

It’s trait number 2 in our 8-point multibagger checklist i- a situation in which a company’s operating expenses begin to grow at a slower rate than its sales.

This trait is called operating leverage, a set-up I was obsessed with identifying early in my full-time investing career. Said in another way, it’s when net profits grow at a faster rate than sales.

I cover this concept in a video case study of RWWI below. I also cover two other multi-bagger factors that led to the RWWI impressive performance and go over the concept of what a BigCapMicro is…and why I think this kind of stock will be a big beneficiary of a multi-year microcap bull market we see forming. 

By the way, there is a potential downside to operating leverage, which I also cover.

I presented our bullish thesis on RWWI to GeoInvesting premium subscribers on February 8, 2019 at $3.70. Today, the stock trades in the $23 range, off its recent high of $25.00.

I hope you enjoy the video:

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