BlackIce Enterprise Risk Management (CSE:BIS), a junior provider of provider of risk management solutions to financial institutions, is undervalued, says Fundamental Research analyst Siddharth Rajeev.
In a research report to clients recently, Rajeev initiated coverage of BlackIce with a “Buy” rating and a one-year price target of $0.16. The stock closed yesterday at $0.04.
Rajeev says BlackIce is well positioned to capitalize on a burgeoning Regulatory Technology (Regtech) sector. The analyst says the company allows its clients to comply with regulatory requirements and improve the efficiency of its data management, analytics and reporting. He adds that the industry has fresh momentum.
“A recent announcement by the U.S. Financial Accounting Standards Board (“FASB”) regarding reporting standards of loan loss allowances by financial institutions offers a significant opportunity for Regtech companies, Rajeev says. “BIS is a first mover in this space through its recently developed cloud based SaaS (Software as a Service) platform. BIS’ target market includes over 5,000 banks and saving institutions in the U.S., reflecting a market size of $450 million a year.
Rajeev says a geographic shift in focus could produce real results for Black Ice.
“The company’s initial focus was on emerging countries in Asia,” the analyst explains. “A successful implementation of their solution was completed for a large financial institution in Vietnam. The company is now leveraging this experience and embarking on an aggressive initiative to enter the significantly larger U.S. market, and capitalize on the recent regulatory changes.”
Disclosure: BlackIce is an annual sponsor of Cantech Letter.