– Provider of outsourced human capital management services/software with a lengthy list of upcoming event catalysts.
– Steady business, with 3-5 year contracts, 15-year average customer life, and 97% revenue retention.
– Comp set is performing very well in the stock market.
– The stock was down 20% after a botched secondary offering, however, the key orchestrator Bill Foley pulled out from selling stock in the offering, and his number two, Bill Massey, subsequently bought $840,000 of stock around current trading levels.
– Expected to recover to pre-secondary levels in short term.
– Peers $WTW and $G with similar expected growth and financial profiles trade at 11x-11.5x 1-year forward EBITDA.
– At this multiple $ALIT is worth $10.5-11.0/share today.
Exp. gain: +20% to $11/share.
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