American Software (NAS:AMSWA) — mrkt cap $300mm; Price $9.05; EV/EBITDA 21
PASS. American Software provides supply chain solutions primarily for CPG customers. Over the past few years, the company has undertaken significant cost-cutting measures, divested non-core businesses, and improved its governance structure by eliminating controlling B shares. It has also rebranded with an AI-focused approach to enhance customer query handling. Customer relationships are sticky, which offers stable revenue streams but poses challenges for growth. Revenues have stagnated over the last five years, and without growth, AMWA is worth significantly less than its current trading prices. Although it could be a buyout candidate, our investment decisions do not hinge on potential acquisitions. As the company focuses on its core segment, we will closely monitor its go-to-market strategy.
Eventbrite (NYSE: EB) — mrkt cap $437mm; Price $4.5; EV/EBITDA NA
PASS. Eventbrite is an online platform connecting creators and event-goers for live experiences. We originally researched the name on 2/7 and assigned it a MORE RESEARCH NEEDED. Despite their improved adjusted EBITDA profile as a result of cutting costs and raising fees, their platform is challenged with fewer events and fewer creators. It is unclear to us if this is more due to macro factors or price increases. Furthermore, we are unimpressed with EB’s management team – after many attempts we are still unable to reach them — and get the sense that they are indifferent to valid shareholder criticisms.
Douglas Dynamics (NYSE: PLOW) — mrkt cap $494; Price $21.4; EV/EBITDA 10
PASS. Douglas Dynamics is the leading manufacturer of snowplows and ice control equipment in North America. They sell heavily to distributors located in the Midwest and East Coast. Some of PLOW’s brands have been around for over 70 years. The typical end user has about 10 trucks and depends on these plows for their livelihood. Their sales cycle is dependent on snowfall in the months of October and November, which has been severely below average in their regions, hence the 52-week low stock price. “We approach each year as it could be one of our best or worst” is common to hear from PLOW management. We think PLOW is a good business with significant brand loyalty – we will keep it on our watchlist and wait for a better entry point.