 Welcome to the channel. This is Reliable Rudy today We are going to make a part 2 video on wayside technology group And we are going to focus on the stock analyzer tool If you miss the video of the financial statements for wayside technology That video was the most recent video. I posted make sure you go and check that out So that you were up to date, but first before we get into this video I am not a licensed financial advisor Everything in this video contains only my opinion and is for entertainment purposes only Okay, so going into What type of projections we're going to make for this company now? I will say it is my job to be conservative I'm not going to use double digit growth numbers for this company Because there are how many different stocks out there. What makes this one so special? Now me personally I have never heard of wayside technology group either I do not know enough about the company to be able to have confidence in putting that double digit growth numbers in So going into revenue growth, what numbers am I going to put in? So we are going to go over to macro trends We're going to type in wayside technology group. Okay, so here we have revenue now first thing that's eye-popping to me is Right here huge decline in revenue. What was this all about? I mean I I Don't know what this was all about and I can see this was in the year 2016 So if you are a shareholder of wayside technology, I would make sure that you understand what it corresponded over this year Now you might have to go into the 10k for 2016 to find that out and see what they say about that But the reason why I decided I'm going to use a stock analyzer tool is just how consistent this growth looks since that From 2017 and moving forward Now I can see there are a couple of large spikes for instance The end of 2019 they grew 25 percent 40 percent and there is one more right here at 31 and a half percent I'm looking at the growth year over a year Now let's not forget 2021 We printed a bunch of money and a lot of people have money to spend Did they benefit from that I do not know I've not looked enough into this company to understand how they would personally benefit from that but It was to me I I think it's very important to understand that 2021 was a fluke year especially for a lot of companies so Going into what type of revenue growth. I'm going to project I can see multiple times throughout this period You know, they do have consistent double-digit growth, but is that sustainable going forward? Like I said, my job is to be conservative. So the numbers that I'm actually going to use I'm going to use four Six and eight and I'm actually inclined to use lower numbers than that But for to get a baseline of of this company you could use four through eight But I'm actually you know, I'm actually gonna change that I'm going to use two through six Because I want to add that extra margin of safety. This is over a 10-year analysis. So going back to the revenue I'm looking at what this revenue is going to be like over the next 10 years. I want to be conservative. I Can't stress that enough So profit margin. So next thing we're gonna go to we're gonna go to margins Now I can see that same thing. Yeah, I don't know what corresponded right here, but I can't see Well, we're looking at the net profit margin right here Consistently around that one to two one and a half to two now after that year three To one and a half three One and a half two Okay, so pretty consistent right in that range So I'm going to use profit margins in between one and a half to three Maybe push that up to three and a half on the high side. So profit margins, you know, let's just keep it simple Let's use two two point five and three two two point five and three now that adds extra margin safety I know that their year-to-date profit margins is three point seven percent But you've seen when I was looking through these profit margins multiple times they push up to that three and then you know multiple times I get back down underneath that two as well so Same scenario my job is to be conservative. Is it possible for them to? Post hire profit margins and three yes, it definitely it definitely is but I'm trying to find a ballpark average here So I like these profit margins right here and for free cash flow margins, you know, I could use a little bit higher But we did if we go back to the cash flow statement and we're on an annual right here I can see that their cash flow is very skewed over their last five years from this year in 2020 You see this huge spike in free cash flow This is why I'm not really worried about now There are some scenarios where I will use higher free cash flow margins and profit margins But in this scenario, is it realistic? Is it it's easy enough for me to see that this five-year average is skewed by this year? so Now I can also see okay. I miss that in my first video. Here is the acquisitions right here I can see in that year. They made an acquisition Huh, does that have anything to do with why this year was a spiked free cash flow year? Now also with any acquisition. I want to know what kind of acquisition they made So if you are a shareholder or you are interested in buying this stock make sure you go understand what company they bought how that is going to benefit the company and Also, did they get that company for a decent value? So That is not gonna be for this video Right now we're focused on what numbers we're projecting. So going back to the stock analyzer. I Can see for this type of growth What type of PE am I going to pay for now? I can see their current PE is 12 now for It's tough to say because I'm not going to give a premium on PE because one I've never heard of the company and and two There's just a couple red flags also in the financials that I'm just not as comfortable with so I'm going to be conservative I'm going to use 10 12 and 14 10 12 and 14 now I think this bakes in a decent amount of profit or a margin of safety and for a desired return We are going to use that 15% because if I'm not getting that 15 percent, you know, I'm not even gonna waste my time with this company I'm going I'm just gonna simply continue cost averaging into vt and vx us So we're gonna hit analyze here now. I can see okay So we got a ballpark range now the current stock price is 30 So getting pretty close on these high assumptions do I think it's possible for them to put up these high assumptions? I do so real quick We're going to tweak these low middle and high assumptions. We're gonna use four through eight Because I wouldn't be surprised if they're able to put up that high single digits over the next 10 years if we go back to revenue You can see multiple times they're putting high single-digit growth and I think it's it would be reasonable to To plug that in for our assumptions So we're going to also tweak these profit margins that they're having higher revenue What would it look like if they were getting higher profit margins? So we're gonna use 2.5 3 and 3.5 2.5 3 3.5 I think it's reasonable for them to have a 10-year average right in this range now also for a higher revenue I'm going to pay a higher Premium for a price to earnings ratio. So I'm going to make that 12 14 16 12 14 16 I still want this 15% annual return now when I hit analyze right here I can see if they're able to put up these types of numbers over the next 10 years I am starting to get interested in this stock in particular so Just a quick recap of this company I always think that it is also beneficial to see what if they were to stay flat over the next years So we're going to put in a couple more assumptions. We'll leave these profit margins right here But I want to see what type of Numbers I'm getting projected if they just stayed flat in revenue over the next 10 years now for this revenue growth I'm going to pay a less pe for it. So I'm going to use 8 10 and 12 8 10 and 12 I still want that 15% return okay, so If they were to stay flat these are the numbers that I'm looking for where I'm interested in the stock so I have three different analysis on this company and The one that I feel most confident with would be to probably take that middle assumption Here are my middle assumptions. Okay, so I'm going to Hit add to watch list now This is going to notify me if the stock price of wayside technology group ever gets to 17 and a half And we will dive deeper in and see if we can find other things out about the company so notify me and Boom just like that in our watch list. It's going to notify me exactly when we get to that So that is going to complete the video. I'll hope you guys like the analysis on wayside technology group And of course I will see you on the next video