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Caldwell Partnersí rapid growth will not go unnoticed much longer
Posted by: Gerry Wimmer
4/19/2015
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TOP IDEAS: With revenues of $50 million plus, Caldwell Partners International (TSX: CWL) will now be on the watch list of strategic buyers which could value the stock at $2.30 and higher.




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.


With a year-over-year revenue increase of 30% in Q2, Caldwell Partners International Inc. (TSX: CWL - $1.26) posted another strong quarter in fiscal 2015. But what has gone unnoticed: In the last 12 months this Company has generated about $50 million in sales, an annual revenue run-rate that, no doubt, will be exceeded by the time Caldwell Partners reports its fiscal 2015 results.

Caldwell Partners International is a premier 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 where an executive search is seen as an important business investment rather than an expense. Caldwell Partners' executive search expertise serves a multiple of major industries, including Financial Services, Technology, Industrial, Insurance, Healthcare, Consumer, Media and Government.

We reported in our blog post last year that Caldwell Partners was poised to grow (See: Caldwell Partners is on a growth course). In fiscal 2013, the Company reported annual revenues of $33.8 million. This fiscal year the revenues should top $50 million. Caldwell Partners has grown rapidly.

What is behind the growth?

1. The Caldwell Partners brand is strong as one of the world's most trusted advisors in executive search. Its business operations have momentum.

2. The recent and continuous arrival of high-calibre executive search partners who are deciding to join Caldwell Partners is building the Company's overall market presence and industry competitiveness.

3. Average fees and search per partner at Caldwell Partners is at industry-high levels.

4. Caldwell Partners has an international footprint with offices/partners located across the United States, Canada and the UK (London).

5. The current business environment for executive search services is robust.

With a $50 million revenue run-rate and its international presence, Caldwell Partners will be on the radar of industry consolidators.

Typically an executive search firm is valued at a range of 1 to 1.4 times its annual revenue run-rate. This suggests that today Caldwell Partners is worth $50-$70 million or approximately $2.30 to $3.30 per share. This equates to a potential average upside of 122% in the stock price from its current trading levels.

Does it pay to hold Caldwell's stock today and realize this value?

We say yes. Why?

1. The Company pays a $0.02 per share quarterly dividend (a 6.1%yield).

2. Dividend payout rates have increased annually over the last three years.

3. Caldwell Partners maintains a very strong balance sheet with cash on hand and no debt.

4. The Company is profitable.

Therefore we still recommend small cap investors should buy and hold Caldwell Partners' stock.

Caldwell Partners has approximately 21.2 million shares outstanding.

The Caldwell Partners International website: www.caldwellpartners.com

Author ownership disclosure: TSX: CWL - YES


Read Disclaimer:

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 advice, should consult a qualified, registered, investment professional. This 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.

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Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.