Investment Q&A

KITS is a small-cap retailer that provides various eyecare products. KITS’s growth in the last few years has been solid, more than 15% on average, driven mostly through organic growth. KITS has a strong balance sheet with net cash of $5M and has already generated positive cash flow, which the company can use to fund growth internally. Based on consensus estimates, sales are expected to grow by 15% over the next few years. KITS recently experienced very solid momentum as the company improved profitability while continuing to maintain a high growth rate. We think KITS is a very interesting small-cap name that could be a potential multi-bagger, while seeing large volatility alongside this. We think investors can add a small position and average up into the name over time if momentum improves.