Tecsys Inc (TCS.TO)

Based in Montreal, they sell supply-chain solutions to healthcare. Also in auto parts. They provide end-to-end solutions. They sold off hard in 2022, despite doubling revenues in the past 4 years, including growing high-margin recurring SAAS to 60% of total revenues. Profitable and reinvesting in organic growth. They dominate the US healthcare market. Trades at only 2.5x revenue, much lower than peers.

 TCS has performed really well in recent quarters due to strong Saas subscription bookings with Annual Recurring Revenue (ARR) up 27% to $75.4M compared to $59.5M in the same period last year, and is now trading at 3.7x times' Price/Sales. 
In the 3Q, TCS’s total revenue grew 10% to $38.9M, beating estimates of $37M and EPS was $0.08, beating estimates of $0.07. The balance sheet is strong, with net cash of $27M. 
Trailing twelve-month cash flow is still negative due to investment in working capital. 
Based on consensus estimates, sales are expected to grow by 7%, while EPS is expected to be around $0.12 in 2023. 
The company has been executing really well by growing its Saas subscriptions by more than 30%. It is not risk-free by any means, and its small size adds some risks.
But we would be comfortable adding. 
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Strong key performance indicators. Recent quarterly miss on earnings. SaaS business strong. Backlog burn slower than expected. Unlock Premium - Try 5i Free

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. EPS missed expectations though revenues beat expectations. Revenues increased by 12% you. The emphasis for companies on supply chain management will be a tailwind for them. They will continue to grow top line and if they benefit from FX then the company can perform quite well. Unlock Premium - Try 5i Free

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Revenu growth has accelerated recently. While the company is expensive on a price to earnings basis, it is still cheaper than most tech stocks on a price to sales basis. Unlock Premium - Try 5i Free

(A Top Pick July 21/16. Up 8.81%.) They make the lives of hospitals more efficient with some of their supply chain management work. A high recurring revenue. Earnings are expected to double by April 2018, going from $.24-$.51, giving you a 22X PE. They are free cash flow positive. ROE is very good at 24%. Feels this still has further upside.

This is in the hospital supply chain management. It has roughly $120 million market cap. They have 2 new modules, one for in-house pharmacies in hospitals, as well as operating rooms. It keeps track of where all the stuff is. That has doubled the revenue potential per hospital. Their pipeline sales over the last year has increased by more than the factor of 3. Year-over-year sales were up 26%. Year-over-year earnings, free cash flow and EBITDA grew over 32%. Dividend yield of 1.21%.

(A Top Pick March 16/16. Up 13.87%.) This is a great management team that has been around for a long time, and own quite a few of the shares. There was some weird selling pressure at the end of last year. He expects to see growth on a continuing basis.

Supply chain management for hospitals. Garbage cans with RFID tags. They do supply chain throughout the hospital. This is one of the cheapest entry points. It is well owned by management.