Post by
Possibleidiot01 on Mar 22, 2024 8:11pm
Greystone Capital Q4,2023 newsletter
Top Five Positions
Sylogist (SYZLF)
Sylogist is our public sector software business that, like Franklin Covey, has undergone a
significant strategy shift in pursuit of becoming a much higher quality and much more durable
business. The company has successfully transitioned their business to a cloud-based SaaS
platform, repaired relationships with customers, entered significant new whitespace
opportunities, improved the management team and Board, strengthened investor
communication, and attained sell side coverage, all in the span of a few years. The past three
quarters for the business have all shown record results from both top line and organic growth
perspectives, and the company shows no signs of slowing down. Not to mention they have
been consistently cashflow positive. Yet, shares languish well below peers, at a valuation not
reflective of the underlying business quality and growth runway.
Outside of excellent operating results, I don’t believe there is much more that Sylogist could
be doing to increase per share business value, other than repurchasing stock, which they have
been very active in doing. It’s only a matter of time before the market finally takes notice.
Sylogist is not a 50% top line SaaS growth business. But there aren’t many publicly traded
businesses that exist with Sylogist’s fundamentals, trading at Sylogist’s valuation. There was a
time not too long ago where investors were eagerly paying >10x revenues for SaaS based
businesses. Sylogist trades at <10x EBITDA. With continued execution, and as they continue
to repurchase their own shares, I am hard pressed to find a scenario where the stock doesn’t
trade meaningfully higher than today’s price.
I’ve also done my part to bring awareness to the business and help communicate the story,
given I believe the upside from today’s price could be meaningful. I was recently invited to the
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Yet Another Value Podcast, where I talked about the investment thesis more in depth. I look
forward to seeing how the next few years unfold for this business.