Inflation resistant, 100% ROIC small cap with EPS tailwinds

+50% upside potential to conservative fair value - potentially much more

"A brand is a wonderful thing to own during inflation"- Warren Buffett

Summary

• This “hidden gem” was kicked out of the Russell 2000 Index this year, which triggered a non-fundamental selloff in the stock

• Consistently a +100% return on tangible capital business - well positioned to benefit from inflation

• Sailed through covid, resilient - operating income declined only 6% during the worst year of covid mayhem

• “Core” segment has averaged 8% year growth for the past 5 years and revenue is 99% pure pre-tax profit - an incredibly valuable income stream

• This record has been hidden due to the tough covid operating environment in its less valuable operating segments, plus an antiquated industry classification

• Intellectual property/strategic/core segment value is ~2X the total enterprise value (my estimate) making the undervaluation highly evident

• EPS growth tailwinds in fiscal 2023 (ending 3/31) plus increased awareness will likely put this stock back into the Russell 2000 Index next year

• I see +50% upside to conservative fair value, with potential for greater gains over time - or if the company is acquired