Hi hunters,
In the past, I explained that my favorite companies are what I called phoenix companies.
Like that bird that rises from the ashes.
A company that reinvents itself. On the surface, a declining business, but under the hood, something powerful is brewing.
Phoenix companies give us a chance to profit from a double whammy:
Multiple expansion
EPS growth
After all, if the company looks good on the surface, that goodness is already priced in, and you can only profit from possible future earnings growth.
The company below is already up 200% over a year.
It’s a great example of a phoenix company and also a test of whether we can overcome price anchoring.
Winners keep on winning. Does that statement hold true here?
Let’s find out!
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When a company acquires another business, and it does so well that it becomes the biggest part of the business within a few years, screeners and analysts are slow to pick up on these changes at the micro cap level.
This offers the unique chance of getting in early into a company that is transitioning and will eventually re-rate thanks to a changing narrative from dying broadcaster to advertising technology fast grower. The new management is actively pushing this change and is convinced that they changed the payment structure towards as much Equity as possible. At the same time, the company has a nice dividend yield of 2.3%.