market folly

We're posting up notes from the Capitalize For Kids 2018 investment conference.  Next up is Colin Stewart of JC Clark who pitched a long of Information Services Corp (ISV.TO).


Colin Stewart's Capitalize For Kids Presentation: Long Information Services Corp

•    L/S in Toronto. 9.2% net for 19 years
•    Attractive businesses today – as seen by the what the multiple market is paying for them
o    Infrao    Database / storage
o    Land / Real estate
o    Tech
•    Recurring revs, pricing power, high margin structure, etc
•    Similar characteristics, less well know
•    Land registry has those characteristics
•    Information Services Corporation
o    Saskatchewan land and corporate registry services
•    45% upside over next 1-3 year
•    Monopoly position in its core registry business
•    Undervalued, underfollowed, housing worries
•    Can grow + M&A opportunities
•    Good biz, cheap asset, growth = asymmetric
•    7.7% FCF yield•    Registry ops 54% revs
o    15 years left on MSA w/ SK governmento    Monopoly on this biz. Can use and resell data later
o    0.3% of all real estate transactions in Saskatchewan
•    Services 33% revs
o    Distribution of public records and data
o    Growing thru acquisitions
•    Tech solutions 13% revs
o    Bought a product they used a ton and liked

Secular trends
Under levered, cheap multiple
Core registry is infra structure like asset
High quality biz
Underfollowed
Valuation is great
Providing backend tech to Nova Scotia, wins in Arkansas and Ohio to provide their service.
Teranet at 10.2x EBITDA in 2008. Had 10 years remaining on their contract.
At least 45% undervalued


Be sure to check out the rest of the presentations from Capitalize For Kids 2018.