Diversified Business Model

  • BTS has a diverse client portfolio consisting of established players in their industry. BTS’ global presence, highly competitive and innovative offerings, and premium brand recognition continue to produce a high paced growth in sales.
  • BTS is adapting to digital transformations and introducing more interactive online platforms as a source of future growth.

Management

  • CEO & CFO have been with the company for 25+ years. CEO founded BTS and is largest shareholder at 17% of the firm.
  • BTS has produced continuous growth in sales and net profit, speaking highly of management capabilities.
  • BTS has undergone several acquisitions over the past years while continuing to raise their dividends. Management has leveraged acquisitions to find cross-selling synergies to present a more complete offering and expand their global reach.
  • BTS has almost no debt and are building cash, positioning themselves well for future acquisitions and/or increased dividends.
  • Proven ability to foster long-term client relationships averaging 6-8 years by delivering visible results.

Financials

  • EBIT of 10.6% in 2017 compared to an industry average of 8-10% due to their industry leading customized cloud based business simulations. Management’s long-term goal is to reach an EBITA Margin of 15% by increasing operational efficiencies through new technologies and delivery methods which they’ve heavily invested in in recent years.
  • Sales per employee is higher than the industry average despite increasing their workforce significantly in the past few years.
  • Management has increased dividend each year as they continue to meet their goal of a dividend payout of 40-65% while rewarding investors by growing the business organically and through acquisitions.

Valuation

  • Currently trading at a premium, BTS still produces an upside over 30% based on DCF, EV/EBIT, and P/E given their high quality business, improving KPI’s, and strong balance sheet. Cultivating a strong investment for long-term investors.

Analysts: Michael Vuono and Jacob Svensson

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