Lares Capital
Hedge fund manager, small-cap, long/short equity

Spar Group: A Growth Company At A Still Very Reasonable Price

Introduction

Spar Group (NASDAQ:SGRP) is a micro-cap ($40 million) company with a still small but rapidly growing revenue base that flies under the radar of most institutional investors. The company carved out a nice niche in outsourced merchandising and assembly services with a current revenue exceeding $100 million. The company is expected to grow its revenue about 15% a year both organically and via small acquisitions, which would allow it to double in size in five years. It carries no long-term debt and, even despite its small size, has a leading position in its markets.

Fig 1: Stock chart (Yahoo finance):

(click to enlarge)

Business overview

The largest portion of the company revenue is in "Syndicated Services": servicing...

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