John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Computer Services Is An Attractive LBO Candidate With No Analyst Coverage

Computer Services (OTCQX:CSVI) is undervalued given its stable revenue and cash flow, favorable growth prospects and shareholder friendly management. Furthermore, the high free cash flow, recurring revenue stream and lack of debt should attract financial or strategic buyers.

Company overview

CSVI.PK provides core banking, payments processing, mobile/internet solutions, card services, risk assessment, fraud prevention, managed services (outsourced cloud-based IT and security) and regulatory compliance solutions primarily to financial institutions.

Investment thesis

Although CSVI.PK appears fairly valued on an absolute basis, any discussion regarding the valuation must be taken in context. The investment decision making process must incorporate industry and company specific fundamentals, which requires a greater use of qualitative research (compared to quantitative) that may show the stock...

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