TOP IDEAS: Caldwell Partners International's (TSX: CWL)
stock is up 76% with more upside to come - Investorfile Target Reached.
Investorfile’s share price accumulation
target of $1.30 for Caldwell Partners International Inc. was reached on July
18, 2014. For the record, we do not revise share price targets for our
Investorfile Top Ideas - Small Cap Value Stocks. We have positioned our blog to
be one of the first providers of a pragmatic perspective of a small cap company
stock's potential worth, where there may be uncovered value that has been
largely overlooked by the investment community.
Caldwell Partners International Inc. (TSX:
CWL - $1.30) is a North American executive search firm whose focus is on the
high end of the employment search market; for CEOs, CFOs, presidents, boards of
directors and senior level positions. The Company has about 32 executive search
partners in the USA and Canada with a
revenue run rate over $40 million.
For Caldwell Partners, we think the
Investorfile blog has had a pretty good read on the Company’s business
prospects and stock appreciation potential as one of our Top Ideas.
Case in point:
First, it was our prediction last December
that Caldwell Partners' executive search business was on the upswing and should
realize a big turnaround in revenue growth and profits for fiscal 2014 (See: Investorfile
strikes big on 3 small cap predictions in 2013; declares 3 more for 2014
– New Prediction #2). That prediction followed our blog post on the Company in
November 2013 (See: For Caldwell
Partners International: 2014 could be a breakout year for profits and stock
Since that time and nine months into fiscal
2014, Caldwell Partners reported that revenues reached $31.9 million, 36%
higher than 2013 with profits about $0.06 per share compared to a loss of $0.06
per share the year prior.
Second, we suggested 3 months ago that
small cap investors should pay more attention to Caldwell Partners’ stock to
start sharing in the gains (See: Caldwell Partners is on a growth course). Then
the Company’s stock was worth $0.96.
Today Caldwell Partners’ shares trade at
The question now: Is there still plenty of
upside potential for growth investors to continue to invest in Caldwell
We say yes, and give 5 reasons why:
- Business metrics are strong. The Company recently has said they continue to see gains in important metrics for
the executive search business such as average fee and searches per
partner, and revenue levels on a per partner basis are at a new high.
- Cash rich to aggressively grow. Caldwell Partners has about $11
million in unencumbered cash on hand (no debt) which will be used grow for new partner
- Increasing dividends. Last year the Company increased the
dividends, while this year Caldwell Partners is more profitable and can
afford even higher dividend payouts.
- Attracting new shareholders. Caldwell Partners' market capitalization is on
the rise, which is beginning to attract a wider institutional investor
audience to invest in shares of the Company.
- Takeover target. Not that a takeover is imminent, but the
Company’s growing revenue base (of over $40 million) could attract a buyer
looking for footprint in the North American executive search space.
The stock price is up 76% since we first
recommended that small cap value investors should accumulate Caldwell’s stock up to a price of $1.30 per
share. Including dividends the total the return to date is 113%. (See: Caldwell
Partners International: US expansion pays "dividends” for small cap value
investors.) That said, we are still very bullish on the Company’s fiscal
2014 outlook and the stock price should continue its appreciation trend beyond
The Company currently pays an annual
dividend of $0.07 per share, paid out quarterly.
Caldwell Partners has approximately 21
million shares outstanding.
The Caldwell Partners International website: www.caldwellpartners.com
Author ownership disclosure: TSX: CWL - YES
This article is for informational purposes
only. This article is based on the author's independent analysis and judgment
and does not guarantee the information's accuracy or completeness. The
information contained in this article is subject to change without notice, and
the author assumes no responsibility to update the information contained in
this article. The information contained within this article should not be
construed as offering of investment advice. Those seeking direct investment
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is not a direct or implied solicitation to buy or sell securities. Readers are
advised to conduct their own due diligence prior to considering buying or
selling any stock.
Investorfile.com is not engaged in an
investor relations agreement with The Caldwell Partners International Inc. nor
has it received any compensation from The Caldwell Partners International Inc.
for the preparation or distribution of this article.
The author of this article has acquired and may
trade shares of The Caldwell Partners International Inc. through open market
transactions and for investment purposes only.