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

Investors Are Judging Legal Technology Provider Daegis Guilty Despite Evidence To The Contrary

(Editors' Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.)

Key takeaways

    Daegis (NASDAQ:DAEG) trades at a slight discount to its closest peer despite an inflated multiple due to a temporary decline in EBITDA, which should rebound as the ongoing turnaround progresses over the next two years and results in the current valuation disparity becoming even more apparent. Moreover, the expected improvement in profitability should result in the ignored yet significant deferred tax asset gradually being factored into the overall valuation. Management has been proactive in response to the current challenging environment by significantly reducing ...
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