New Coverage – ReposiTrak, Inc. (TRAK)

ReposiTrak provides business applications to aide its customers with supply chain solutions.  Provided as software-as-a-service, the applications are used primarily by consumer retail chains, wholesalers and distributors.  The Company hosts the ReposiTrak MarketPlace for supplier discovery and business-to-business purchasing decisions.   There are numerous competitors that often focus on one business vertical or another, and no one company commanding a significant market share.  ReposiTrak differentiates itself in the well populated landscape with unique product features and high quality consultative services.

In the twelve months ending March 2024, ReposiTrak reported $20.08 million in total sales, providing $4.87 million in operating income.  Importantly, the Company was successful in converting 33.40% of sales to $6.71 million in operating cash flow.  At such a high converse rate, the Company has access to growth capital.  Indeed, ReposiTrak does not rely on leverage as is revealed by its debt-to-equity ratio of 0.10.

Internal investment in growth projects is clearly justified.  In the trailing twelve months, the Company earned approximately 12.86% on its invested capital.  Since its cost of capital is estimated at 6.68%, an excess return of 5.18% accrues to stakeholders.

 

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