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Costar Technologies: Asymmetric Risk/Reward, Discount To Book Despite 20%+ ROE

Costar Technologies (OTCPK:CSTI)


Costar (OTCPK:CSTI) is an extremely interesting micro-cap opportunity. With a market cap just over $9m and average daily volume of under 1,000 shares, the stock appears to be flying under the radar despite strong fundamentals and a healthy industry backdrop. The stock has made a nice push in the last couple of weeks but is still extremely cheap relative to its asset base, current earnings, and future earnings potential.

(click to enlarge)

To give you an idea of how cheap the stock looks at first glance, take a look at some summary valuation and operating metrics on a TTM basis.

First things first: CSTI trades at a 14% discount to book. The...

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