reports
- Paul Hill
Recovering faster than anticipated
Price can often be a poor indicator of value, especially during uncertain times & for smallcap stocks. So it is for specialist US background screening & medical testing firm ClearStar. Indeed despite the shares dropping on low volume, the company has actually traded much better than we had previously thought possible. Not only “experiencing a significant uptick in sales from the end of May, which has continued into Julyâ€. But also generating positive EBITDA (pre SBPs) between May & June, a...
- Paul Hill
Bouncing back quicker than anticipated
Ahead of ClearStar’s AGM, Chairman Barney Quinn today reported : “While it remains too early to estimate the impact of COVID-19 on full year 2020, we are increasingly optimistic that it will not be as bad as we once feared.’’ Although America lost 20.7m jobs in April, equivalent to 15.5% of the workforce, the good news is that green shoots are already starting to appear. Not least with May’s non-farm payrolls figure coming in at +2.5m gain (13.3% unemployment rate) vs a forecast decli...
- Paul Hill
H2 demand surge anticipated as US reopens
Today’s 2019 results were in line with our revised expectations - reporting adjusted EBITDA (post SBPs) of $370k (-$108k LY) on turnover up 14% LFL to £23.0m ($20.1m). Driven by strong top line growth from Medical (+21%, MIS) & Direct (+32%), together climbing 26% to $16.5m (72% of group). ClearStar also traded well up to February, although from mid-March onwards lockdowns began and corporate America shed millions of staff: leading to a loss of >30m jobs nationally. Equally the big 3 diagnos...
- Paul Hill
Deeply undervalued, high growth stock
Occasionally even professionals lament about ‘the one that got away’. However investing is a bit like surfing, ‘you don't need to catch all the big waves to still have a great time’. Luckily for investors, the ClearStar ship has not sailed yet, despite the shares (at 49p) trading at a 56% discount to our 115p/share valuation. This unjustified gap between price (ie what you pay) and value (what it is worth) is likely to close at some point. Especially as the firm continues to deliver new...
- Paul Hill
Brief lull in financial screening volumes
Underlying demand for ClearStar’s tech-rich background & medical (MIS) screening services remains buoyant, as evidenced by its record orderbook and healthy pipeline – augmented by November’s ebullient US jobs report, where unemployment fell to a 50-year low of 3.5%. However as with many ‘industry disruptors’, there are occasional bumps along the road, with the Board saying today that Q4’19 “financial institution screening volumes [eg to multi-national banks] have been lower than p...
- Paul Hill
Clinically proven to deliver faster growth
There are now approx. 57m Americans (source: 2018 Gallop poll) working at least part-time in the gig economy. Here the elderly rely on their domiciliary staff to be both honest and competent carers. Equally Angie’s List users trust that the plumbers, builders and/or electricians they hire, have the necessary insurance and qualifications. Not surprisingly this is a massively complex task, made worse by the largely siloed nature of the records held within each State and county. Enter ClearStar,...
- Paul Hill
UK plc ‘going for a song’
Being a shareholder in a company that receives a juicy takeover offer is a marvellous feeling. Something that many fortunate investors have experienced over the past 3 years. Thanks to a spate of M&A bids by deep pocketed overseas buyers - partly triggered by the June 2016 Brexit result, which sent the £ tumbling and adversely affected the FTSE. Consequently today, given this trend is unlikely to end anytime soon, we’ve highlighted 30 possible acquisition ideas in the attached research pape...
- Paul Hill
Shooting the lights out
Twitter is an incredibly useful service, albeit it definitely makes it much harder to invest, when whole industries can be rocked overnight by a simple tweet from the White House. However what President Trump has been 100% consistent on, is his ‘America First’ policy. Indeed we believe this 'over-riding #1 priority’ should continue to support the US as the best performing G7 economy heading into the Nov’20 Presidential Elections, and remain the ‘destination of choice’ for many fund ...
- Paul Hill
Organic growth surges further ahead
According to an Aug’18 Gallup poll, there are around 57m Americans, who work at least part-time in the ‘gig economy’. An enormous number, with many still not vetted thoroughly beforehand, in terms of checking for correct licenses, qualifications, training, criminal records and so forth. As such, there has been a steady stream of serious incidents, where ‘rogue’ contractors, financial advisors, chauffeurs, care providers and other casual staff have acted improperly. Not only endangering...
- Paul Hill
Organic growth is accelerating, and quickly
Surefire winners don’t exist in the real world. However in the smallcap space, we think Clearstar is a pretty close alternative. Its two main growth engines – Medical Information Services (MIS) and Direct – are expanding at around 30% pa, and now represent circa 70% of the group. This is hugely encouraging, because as the company scales, a greater proportion of incremental turnover should fall straight to the bottom line. Granted, Clearstar is currently investing in brand awareness and its...
- Paul Hill
How to buy $1 bills for less than 25 cents
GARP investing is all about buying the right stocks, run by the right management teams, and importantly at the right price. Not an easy combination to find in today’s markets. However sometimes, just such a company could be hiding directly under one’s nose. Take ClearStar, a tech-enabled Human Capital Integrity specialist - who after a period of heavy IT/software investment - now enjoys 1st mover advantage within the multi-$bn US employment & medical screening market. Indeed having construc...
- Paul Hill
Happy customers beget happy investors
World-class companies have one thing in common. They are all totally committed about delighting their customers. Knowing that this can create a powerful feedback loop, and likewise trigger more client wins, higher hit rates, positive referrals and follow-on work. Today we saw this virtuous circle in action again at ClearStar, a specialist in background & medical screening solutions. Announcing that it had secured a new 3 month $350,000 contract. Both extending and expanding the services it alre...
- Paul Hill
‘Disruptive’ US tech firm set for banner 2019
ClearStar is an Atlanta HQ’d tech firm that is disrupting the $4.0bn-$4.5bn employment & medical (MIS) screening sector. Here, we think its leading cloud hosted mobile/desktop solutions - including biometrics/facial recognition – could even eventually become the industry’s de facto standard. Replacing less efficient & more time-consuming background checks with much faster, IT-centric customer/user-friendly and fully automated applications. Encouragingly, this ‘competitive advantage’ i...
- Paul Hill
2 new contracts totalling >$1m of revenues
10 years on from the $600bn Lehman Bros bankruptcy and subsequent financial crisis, regulators have been busily cleaning up the industry in order to prevent it from ever happening again. The industry needs the best employee background checking solutions available, with news today of one such professional services firm opting to go with ClearStar. A landmark agreement for CLSU, since it is the first within this targeted vertical, and provides a beachhead into the global financial sector. Further...
- Paul Hill
Exciting new channel partner
Founded in 1995 and floated at 57p/share in July’14 (raising £8.8m gross), ClearStar (CLSU) is a pioneering technology provider to the c. $4 billion global job screening (60% of H1 sales) and drug/medical testing (40%) markets. Often the best ideas are the simplest. Take the humble employee ID and/or visitor card. There are probably 10s if not 100s of millions of these dished out globally each year to new recruits, temporary workers, contractors, visitors, etc. Not only costing a small fortun...
- Paul Hill
Valuation raised due to accelerating growth
Founded in 1995 and floated at 57p/share in July’14 (raising £8.8m gross), ClearStar (CLSU) is a pioneering technology provider to the c. $4 billion global job screening (60% of H1 sales) and drug/medical testing (40%) markets. Today’s H1’18 results appear very encouraging: sales climbed 10.8% to $9.9m ($8.9m LY) - representing their highest level ever for a 6 month period, with LFL growth being significantly faster than the broader market. Here, the standout performers were MIS (up +27%...
- Paul Hill
Record revenues and positive EBITDA
ClearStar (CLSU) is a leading technology provider to the multi $billion job screening (63% of $17.8m 2017 revenues, up 11% LFL) and drug/medical testing (H1’18 40%) markets. The firm, head-quartered in Atlanta Georgia (US), employs ~90 staff; and enjoys high retention rates of >90%, and excellent forward visibility reflecting the everyday, low-cost and often mandated nature of its products. Not only is the Dollar the world’s reserve currency, but also the US economy is on a roll. Aided by un...
- Paul Hill
Broadening of medical testing service
ClearStar (CLSU) is a leading technology provider to the multi $billion job screening (63% of $17.8m 2017 revenues, up 11% LFL) and drug/medical testing (37%) markets. Momentum seems to be building. At the 22nd May trading update, CLSU announced that it had secured new work with the likes of Gulfstream Aerospace, Hilmar Cheese and BNSF Railway Company (a Berkshire Hathaway company). Then today came news that the firm had enhanced its medical services platform by integrating the ClearMD mobile d...
- Paul Hill
Valuation rises to 95p/share
How do you decide which equities to buy? Many people rely on the ‘comfort of the crowd’. Preferring to follow what others do to steer them through the markets. Like passive index trackers, this is fine up to a point, say when investing in highly liquid FTSE100 companies. But what about microcaps, where daily trading volumes can be much thinner, and the ‘crowd’ may not exist? Here instead, active fund managers typically focus on the fundamentals and back their own judgement to guide decis...
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.