RSSS - Artko Capital - Research Solutions: A Tumultuous Year But Outlook  And Growth Look Excellent

2024-03-07 09:45:00 ET

Summary

• 2023 was an interesting and a bit tumultuous year for Research Solutions.
• The company has had a busy year in 2023, acquiring two Artificial Intelligence companies, scite and Resolute.
• The acquisitions creates a hereto-hard-to-penetrate backdoor to most publisher databases, creating a substantial moat for the combined scite/Resolute/Article Galaxy product suite.
• We believe RSSS' strategic and financial acquisition value and multiples should be on par with other information service providers at over 10x forward revenue multiples and 20-30x EBITDA multiples.

The following segment was excerpted from this fund letter.

Research Solutions ( RSSS )

Our investment in Research Solutions, originally at sub $1.00 in 2017, though with substantial additions over the years our cost basis has drifted higher, was down 22.0% in 2022, up 41.0% in 2023 and up over 25.0% so far this year. This was an interesting and a bit tumultuous year for the company and the stock but the end outcome, fundamental growth and the future outlook all look excellent from this point. The provider of information services for the scientific industry, not unlike Bloomberg is for finance and Lexus Nexus is for law, grew its 2023 revenues 15.0%, up from 8.0% last year, and what we believe to be the more important metric, its gross profit, over 21.0%....

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