A little-known Canadian payments processor could deliver big returns for investors, says one analyst.
StableView Asset Management analyst Ron Shuttleworth was on BNN’s MoneyTalk yesterday to talk about his top stock picks.
Shuttleworth says StableView focuses on innovation sector companies with the ability to generate free cash flow. The analyst says the fund aims to answer very particular questions about the way potential investments generate and realize cash.
“Is the cash flow recurring, sustainable, growing, repeatable,” said Shuttleworth, who says the fund looks at metrics such as how quickly companies are paid by their customers.
Shuttleworth says one of his current favourites is a bit more early stage than the others. Payment processing company VersaPay (TSXV:VPY), says the analyst, is a turnaround story that is beginning to benefit from a new management team and board.
Three years ago, shares of Versapay were languishing. But in 2013, the company hired software veteran Craig O’Neill to transition it from a legacy business to a cloud-based solution. O’Neill says the company is now making a “concerted effort” to expand its cloud business into the United States.
The company has since appointed former Descartes Systems Group CEO Art Mesher as chairman.
Versapay, says Shuttleworth is “focused on really strong repeatable, recurring cash flow. And that’s what we love”.