MIND provides billing software to small telecom providers. This allows cellphone companies to make sure prepaid customers aren't getting service they haven't paid for, and it tracks and bills the usage of postpaid customers as well. An implementation of MIND's software at a customer site requires a large investment of time and resources (such as training, consulting, installation, hardware etc.), which likely leads to high switching costs. As such, companies in this industry may benefit from captive customers, leading to structurally higher returns on capital.
As a result of the current stock price, the company just announced that it is re-instating its buyback program. The $1.8 million program would remove 1 million shares from the market if done at today's prices. Since this represents 50 days worth of volume, this could move the stock price considerably!
To summarize, you've got an intelligent manager (who took the company from 0 to $20 million in sales) who is also a large shareholder of a business where customers have high switching costs. In addition the company is well capitalized, and trades at a single-digit P/E excluding its cash. Value investors may want to have a look!
Saj, it looks like an intriguing idea. Thanks for it! No position for you though?
No, but that doesn't mean I won't, or haven't since the article.