Been watching DUG for a while and started a position IRL this week.
By Bull/Bear case below:
In an interesting niche, assisting mainly Oil & Gas companies to examine propects, using data analytics on large data sets.
Just coming into profitability in FY23, on the back of really strong revenue growth, particularly in the US.
If (and it's an if) trajectory continues the PE at 23 does not seem particularly high.
Nice operating leverage - employee and operating expenses only up about 10 to 12% in FY23 on 50% higher revenue - obviously hoping they can continue with that ratio!
Minimal debt and starting to get to good ROI, cash flow was strong.
Negatives, things to watch
Stability for CFO, looks like there's been quite a few through there in last 2 years - would be looking for that to not change again anytime soon.
Was this year's revenue recurring or one off - looks to be spread across multiple contracts at least which is encouraging, but hard to tell on my skim of the annual report.
Long term, will there continue to be demand for the core product? - not sure, but they are looking to take their skills into other areas.
Overall, the positives and valuation got me across the line, that and High Performance Computing is an area I've been working with recently and I believe there's some very interesting applications to come (particularly in the Quantum space). The SP is up 100% over the course of this year, but still more to go IMO.