We are adding our first position to the portfolio. It’s a Swedish-listed SaaS microcap company whose share price is down down 46% from its 6-month high.

Why has the share declined from an already modest valuation level? Well, actually, for no apparent reason other than the company's strategic decision to right previous wrongs, which affects the reported numbers in the short term. Is it bad to remove unprofitable and less scalable revenue streams? Well a least we do not think so.

Our view is that the company's intrinsic value far exceeds its current depressed valuation, supported by the core segments' high quality and likely value to a professional acquirer. Underneath the clutter is a SaaS product with minimal churn, untapped pricing power growing by +15% per year, with strong profitability and increasing cash flows.

Currently, the market is selling everything SaaS, which, in combination with low interest in Swedish microcaps, creates this opportunity.

In 2026, we see multiple catalysts that should narrow the current value gap, including likely breakthrough orders in the USA, further strengthening of cash flow, and more.

As the saying goes, “When there is blood on the streets, buy”. And that is what we are doing…

Become a Premium member to read the rest of this memo here, where we outline our reasoning for buying this company, GAV, portfolio weight, reevaluate price action, profit-taking levels, catalysts, valuation and why we believe the risk/rewards are favorable.