Thanks, my friend! And yes, it does seem that it is almost cultural for Sweden, but I treat it as a "truth serum." In the microcap world, you can fake earnings on an income statement, but you can't fake the cash you wire to shareholders!
Great article! I have one question, the competition in AVTECH industry must be fierce…are the competitors much bigger than AVTECH, so they can have much bigger economies of scale and much more clients (i assume this tech are mission critical so switching costs protects this companies) in a way that kills this microcap companies, because they cant compete with the big boys in the room?
Great question, Miguel. The short answer: Giants like Boeing or Airbus usually don't kill niche players; they buy them.
Airlines actually prefer smaller, neutral vendors for things like optimization because they work on both Boeing and Airbus fleets. If you buy a 'Boeing-only' tool, half your fleet is left in the dark. AVTECH is the neutral that works on everything.
For example, look at ForeFlight. It was a tiny flight-planning app that competed with Boeing’s massive Jeppesen charts. Did Boeing crush them? No. Boeing realized pilots loved the specific workflow, so they bought ForeFlight in 2019 to own that niche dominance. In this industry, being the best at a small thing usually leads to an acquisition, so a likely event could be this further down the road.
Great deep dive!
This company checks all my boxes, and I’m definitely going to dig deeper.
I’m not really a fan of dividends in cases like this, but it feels almost cultural in Sweden, so I’ll obviously live with it.
Thanks for sharing this with us!
Thanks, my friend! And yes, it does seem that it is almost cultural for Sweden, but I treat it as a "truth serum." In the microcap world, you can fake earnings on an income statement, but you can't fake the cash you wire to shareholders!
Great article! I have one question, the competition in AVTECH industry must be fierce…are the competitors much bigger than AVTECH, so they can have much bigger economies of scale and much more clients (i assume this tech are mission critical so switching costs protects this companies) in a way that kills this microcap companies, because they cant compete with the big boys in the room?
Great question, Miguel. The short answer: Giants like Boeing or Airbus usually don't kill niche players; they buy them.
Airlines actually prefer smaller, neutral vendors for things like optimization because they work on both Boeing and Airbus fleets. If you buy a 'Boeing-only' tool, half your fleet is left in the dark. AVTECH is the neutral that works on everything.
For example, look at ForeFlight. It was a tiny flight-planning app that competed with Boeing’s massive Jeppesen charts. Did Boeing crush them? No. Boeing realized pilots loved the specific workflow, so they bought ForeFlight in 2019 to own that niche dominance. In this industry, being the best at a small thing usually leads to an acquisition, so a likely event could be this further down the road.
Thank you for clarifying this matter. Keep the good work!