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CSPI


spartansaver
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A company out of my circle of competence, they manufacture IT as well as advanced tech solutions.

 

-Roughly 20M EV

-ITS Main Business dropped off from 80M to 70M in sales

-HSSI (Hidden Business) grew from 7M to 14M in sales (High Margins-Part is Royalties)

          -Part of HSSI business is royalty stream that grew from 1.5M --> 3.4M YOY (100% Margins)

-Price has not moved much in the past two years and fluctuates around 6-8$ a share

-If HSSI continues to grow possibility for increase in price or if Royalties are recurring then that part is at least worth~34M

 

Disclosure- I won't invest because I have no idea what digital signal processing is, but idea seemed like a place to start for someone with knowledge of the field

 

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Cursory inspections

  • For such a tiny company they do way too much.
  • They are competing against some really big and good companies, for which their total R&D budget is not pocket change but pocket lint at 3 million.
  • They have way to much money on their balance sheet.
  • Looks like a fair amount of revenue is from the defense sector. 
  • Particularly the high margin royalty is dependent on defense.
  • They seem to be in the avionics of the E-2D aircraft, (royalty) but there the royalty numbers don't fit the number of planes produced. Unless they were just designed in at a later stage.
  • I am NOT a defense tech guy

 

I've got the royalty at 4.5 million by the way

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