Q: Can you give me your thoughts on Ztest? My understanding is it is undergoing a strategic review, would you buy or wait? Thank you.
5i Research Answer:
At only $8M market cap, it is too small for us for serious consideration. The stock is down 49% YTD. It has a bit of cash, some revenue and was profitable last year, at least. It is cash flow positive. The review was initiated in January. With $3.7M cash at year end, a sale or merger would make sense here. Fundamentals are actually pretty good. But it is too small for investors to bother with. Insiders own 18%, which is good but makes trading even thinner. We would not buy this, though it is likely worth more than its current price.