My New Small Position Described: Part 1.

My New Small Position Described, Part 1. (I’m having trouble posting it so I’ll try in sections)

The small position that I wrote about in my end of the month summary was Red Violet (RDVT), which is a very small company, recently brought to the board by Tommy Tripod, to whom I give thanks. Here are my notes on the company. All is shortened, edited and paraphrased, so any errors will be mine.

The company reminds me of an early version of our SaaS companies, with the opportunity to buy in while the revenue is under $50 million, and the EV/S is minimal for a SaaS company. But keep in mind, this is a tiny company, and it could crash and go to zero too if a large competitor attacks it (More likely probably would be that the large competitor would buy it for $1 billion or so, thus giving us perhaps a triple in a year). Or the whole thing could be a scam. Who knows with a tiny company like this? But read on!

Remember also that this is a very small company and not very liquid, so don’t buy a large position in it. I decided to quit at 1.5% and not get foolish. How can such a small company be listed without an IPO. Because it was a spin-off from another listed company, as you will learn below. That’s why we have the opportunity to buy in to such a rapidly growing company at such an early stage.

As you read on, pay especial attention to the May Shareholder Letter a little way down this post. It was the first time management tried reaching out to investors. They were REALLY flying below the radar up to that letter. And don’t miss my summary paraphrase of the Seeking Alpha article further down. The link to the original article is at end of my post. Have fun.


Mar 2019 – Dec 2018 quarter results Continued growth in revenue and key financial indicators drives path to profitability.

2018 was a transformative year for us, with strong financial performance including 90% yoy revenue growth and substantial progress towards profitability. Our solutions are enabling our customers to grow their businesses, which in turn is resulting in increased spend with us. We are seeing greater new customer adoption across all verticals and the first two months of this year indicate that 2019 will be a monumental year for us. We are as confident as ever in our path to positive cash flow and profitability.

Fourth Quarter Financial Results
• Total revenue up 74% to $4.7 million.
• Net loss improved to $2.0 million from a loss of $3.1 million.
• Loss per share improved by to -20 cents from -31 cents
• Adj gross profit up 186% to $2.4 million.
• Adj gross margin increased to 51% from 31%.
• Adj EBITDA improved to -$1.0 million from -$2.1 million.

Full Year 2018 Financial Results
• Total revenue up 90% to $16.3 million.
• Net loss improved to $6.9 million from a loss of $21.5 million.
• EPS improved to -67 cents from a loss of $2.09
• Adj gross profit increased 407% to $7.7 million.
• Adj gross margin increased to 47% from 18%.
• Adj EBITDA improved to -$4.3 million from -$8.3 million.

May 2019 – Mar quarter results
Revenue up 72% to $5.7 million driving significant progress toward profitability.

We are extremely pleased with our results for the first quarter. With another quarter of sequential record revenue and a significantly improved bottom line, we fully expect 2019 to be a breakout year. Our team continues to enhance the functionality and performance of our solutions and, as a result, we are winning head-to-head challenges against the competition and driving new use cases for our customers. We added over 390 new idiCORE™ customers in the first quarter and continue to see strong growth in revenue from existing customers.”

Financial Results
• Total revenue up 72% to $5.7 million.
• Net loss improved to -$1.4 million from -$2.1 million.
• EPS improved to -13 cents from -20 cents
• Adj gross profit increased 134% to $3.1 million.
• Adj gross margin increased to 53% from 39% !!!
• Adj EBITDA improved to -$0.4 million from -1.4 million.

Business Highlights
• Customer adoption of idiCORE has been strong with over 1,000 new customers added in the past year.
• Recurring revenue continues to expand with 67% of monthly revenue attributable to customer contracts versus transactional usage. Contracts are generally annual contracts or longer, with auto renewal.
• FOREWARN, our subscription app-based solution for the real estate industry, powered by CORE, continues to scale with over 13,000 users added in the past year.


Part 2

Here’s the link to the incredible Stockholder Letter that you MUST read. The link is to the letter on their website. I had copied it and paraphrased it but MF wouldn’t let me post my shortened version. Read it.!!!…


Part 3

Aug 2019 – June quarter results

Record revenue of $7.2 million delivers positive cash flow from operating activities

We had a remarkable quarter with record revenue of $7.2 million, driven by broad-based new and existing customer growth. Put simply, we are experiencing greater demand today than our current resources can accommodate. Achieving positive adj EBITDA and positive operating cash flow is a huge milestone for us and we are well positioned to generate free cash flow in the near term. Additionally, we see ample opportunity to further accelerate our current strong growth trajectory as we turn the corner on free cash flow and reinvest in the business, enabling us to exploit opportunities otherwise restrained by prudent cash management. There has never been a more exciting time for our business.

Financial Results

• Total revenue up 85% to $7.2 million.
• Net loss was $3.9 million (including share-based compensation expense of $3.6 million, which includes a one-time $2.4 million as a result of achieving certain financial milestones) as compared to $1.5 million (including share-based compensation expense of $0.0 million).
• Loss per share was $0.37 ($0.15 excluding the one-time $2.4 million expense referenced above) as compared to $0.15.
• Adj gross profit increased 130% to $4.2 million.
• Adj gross margin increased to 58% from 47%.
• Adj EBITDA was $0.4 million as compared to a negative $1.1 million.

Recent Business Highlights

• Customer adoption of idiCORE has been strong with 350 new customers added to the platform in the quarter.
• New customer revenue grew 99% and growth revenue from existing customers grew 84% over prior year.
• FOREWARN, our subscription app-based solution for the real estate industry, powered by CORE, continues to see strong adoption, adding over 4,200 users in the second quarter.
• FOREWARN was honored to be named second runner-up in the 2019 Awards for Most Innovative Real Estate Technology, competing against real estate technology giants including REDFIN, NRT and Zillow.

Nov 2019 – Sept quarter results
Since our spin-off in March of 2018, we have reported seven consecutive quarters of record revenue and adj gross margin. Adj EBITDA increased over 200% sequentially and we incurred our smallest quarterly net loss to date. I am very proud of our team’s execution year-to-date, seizing upon immediate opportunities while continuing to lay the groundwork for expected future growth. We are experiencing increasing adoption of idiCORE by and among larger customers and FOREWARN is fast becoming the go-to solution for proactive realtor safety. While fourth quarter traditionally presents seasonal headwinds affecting our transactional customers in the way of less business days and year-end budget recasting, we have experienced a strong start to the quarter and are excited to close out a terrific 2019.

Third Quarter Financial Results

• Total revenue up 89% to $8.3 million.

• Net loss was $1.0 million (including share-based compensation expense of $1.4 million) as compared to $1.3 million (including share-based compensation expense of $0.2 million).

• Loss per share was $0.09 aimproved from $0.12.

• Adj gross profit increased 141% to $5.1 million.

• Adj gross margin increased to 62% from 49%.

• Adj EBITDA was positive $1.1 million improved from negative $0.8 million.

• Cash $13.3 million, up from $10.0 million. No debt.

Business Highlights
• Leveraging the power of CORE, red violet’s cloud-based, next-generation technology platform, idiCORE delivered over 400 new customers in the third quarter.
• Recognized as a leading innovative technology in the real estate industry, our subscription app-based solution, FOREWARN, added over 4,100 users in the third quarter.
• Broad-based revenue growth from both new customer adoption and existing customer expansion. New customer revenue grew 67% and growth revenue from existing customers grew 118% yoy.
• Cash was $13.3 million. To meet demand and accelerate growth, we raised $7.5 million during the quarter in strategic growth financing from existing and new investors through the sale of 681,000 shares of common stock in a registered direct offering.


Part 4

Jan 2020 - Seeking Alpha Artice by VG Capital
Red Violet: An underfollowed growth story with significant upside
Core Thesis Points

Asset-light data fusion business set to double sales in 2020 with likely very healthy growth for years beyond that

Attractive fixed-cost business model resulting in rapidly expanding gross margins from about 60% today to almost 80-90% over the next 12 months

Sustained positive operating cash flow generation is also only a quarter or so away.

Highly experienced and well-incentivized management team that owns about 20% of the company and that have only been buyers in the open market.

Management played key roles in the development of the industry. They’ve played this game before and understand the competitive landscape deeply.

RDVT shares are at a significant discount to intrinsic value, trading at only 3-4x Next-12-Month revenue; other companies with similar qualities have fairly easily gone for 7-9x NTM sales or more.

The discounted valuation is being driven by the fact that (1) RDVT is a micro-cap spinoff with no institutional sell-side coverage and (2) until now, management has engaged in minimal investor marketing activity and given barely any guidance (this is starting to change now that a solid foundation for the business has been built).

Previous deals this management team has been involved with and simple multiple compression suggest that shares should be worth a multiple of where they trade today.

RDVT Business Overview
Red Violet (“RDVT”) is a rapidly growing data-fusion software business. Their main asset is what they call their “CORE” technology platform . CORE is a mind-numbingly massive database that consists of trillions of individual data points sourced from many different disparate data sources (i.e. property records, criminal records, court records, employment records, motor vehicle records, social media and on and on). Using these otherwise siloed data sets, the CORE platform fuses the data together into a single contiguous database that can be queried at lightning fast speeds and that can offer a nearly complete view on almost any individual in the country. RDVT currently does $30 million in annual revenue (2019E) selling two software products that sit on top of the CORE platform – idiCORE and FOREWARN .

idiCORE is RDVT’s flagship product which I estimate will have about 5200 enterprise customers (+56% y/y) and will do about $26 million in revenue by the end of 2019 (+70% y/y). idiCORE customers include many companies in the Fortune 500/1000 across a variety of industries, governmental agencies, and law enforcement organizations.

Customers can use the product to gain comprehensive background info on any individual/business – some use cases include ensuring KYC-compliance, hiring-related background checks, credit checks, and even locating individuals for debt collection (“skip tracing”). idiCORE can also be used as an API and serve as the underlying engine for a piece of software that the customer has developed themselves. Pricing for idiCore is tiered and broadly on an as-used basis. The average revenue generated from a paying customer has been increasing over time to about $5,800 per customer per year at the end of 2019, vs $4,400 at the end of 2018.

FOREWARN, is an app used by real estate agents which allows them to run real-time background checks on unknown prospects before meeting them. This is a real concern amongst realtors; a 2017 report cites that 25% of male agents, and 44% of female agents, have reported experiencing a situation where they feared for their security. FOREWARN’s uptake has been swift since its launch about 2 years ago – as of 3Q19, nearly 24,000 agents across the country use the app (over 4000 adds each quarter this year), each paying $20/month for the app. I anticipate FOREWARN will do about $5m in sales in 2019.

The beauty of this business model is in its cost structure. The primary cost of creating the product is the source data, which is bought by RDVT under multi-year contracts with a fixed pricing schedule. This means that once you’ve got your core product built and have a trained sales force in place, every incremental sale made is 100% profit because you’ve already paid for the data but you can sell it an unlimited amount of times. Management has publicly stated that as the business starts scaling up, gross margins should reach about 80-90% vs 62% as of 3Q19. At a $50m revenue run-rate (which I model will be achieved within the next 3-4 quarters), management believes they will start approaching this 80-90% range.

Data Fusion Industry Background & RDVT’s Origins .
Core to understanding the RDVT storyand getting comfortable with this management team is having a baseline understanding of the brief history of the data fusion business. While data fusion is a relatively nascent industry that has largely avoided tech headlines, its impacts have been far-reaching, especially in the fields of law enforcement and risk management. Perhaps one of the higher-profile applications of data fusion was its purported use in the locating of Osama Bin Laden by Palantir, a well-publicized private company in this space. While Palantir has had much of the limelight, the industry can actually trace its roots back to the colorful Hank Asher. Asher founded the first data fusion company, DBT Online, in 1992 but was eventually ousted and bought out for $150 million in 1999.

Immediately following his DBT Online ouster, Asher, alongside RDVT’s current CEO Derek Dubner and current CIO Jeff Dell, began building Seisint, a competing data fusion business. Within just 5 years, the team built Seisint up into a business doing $115m in sales and $45m in EBITDA and sold it to LexisNexis for $775m in 2004. This transaction price implies an externally validated 7x sales and 17x EBITDA valuation multiple.

After a 4-year hiatus, Asher started building yet another data fusion company called TLO (“The Last One”), this time alongside not just RDVT’s current CEO Derek Dubner, but also RDVT’s current President James Reilly and current CFO Dan MacLachlan. Unfortunately, Asher suddenly passed away in 2013 and left behind some confusion with regard to TLO’s future and finances as a significant part of TLO’s funding came from loans from Asher’s estate. To sort out the mess left behind, TLO entered bankruptcy court (despite TLO being on the verge of immense profitability, Asher’s estate lawyers were forced to sell the business in bankruptcy court given their fiduciary duty and the optics of funding a business losing $1-2m/month) and Asher’s daughters were named co-CEO’s through the process. TLO was put up for sale during the bankruptcy process which sparked an all-out bidding war between several very large competitors, including LexisNexis and TransUnion (TRU). After 20 straight hours of bidding, TRU won the aution with a bid of $154m (LexisNexis was about to up their bid to $180m but got timed out by the attorney overseeing the process). I view these bids as a relative valuation floor for RDVT, which currently has an EV of $240m.

RDVT’s current management team wasted no time following the sale of TLO. With the goal of building an even better version of the product they’d built together twice before, the team regrouped in 2014, and began a company called TBO (“The Best One”; an apparent homage to Asher/TLO) and started developing what is today the CORE platform. TBO renamed itself Cogint (ticker: COGT) and publicly listed itself. In 2018, COGT merged with Fluent and began trading under the ticker ‘FLNT’ during this time. Less than a year after the COGT/Fluent merger, the combined company decided to spin out RDVT (rebranded version of legacy TBO/COGT) into its own entity and the entire ex-TBO/COGT team left FLNT to go with the spinoff. With most of the initially heavy R&D capital investments covered during this time via Fluent’s free cash flow, RDVT was ready to hit the ground running after the spinoff.

Competitive Landscape / How Big Is RDVT’s Opportunity?
While it is admittedly tough to pinpoint the exact size of RDVT’s current and future potential market opportunities, “very large” with “strong secular growth” would be apt descriptors. RDVT cites in their corporate presentation a $10 billion plus “Serviceable Risk Analytics” TAM and an incremental $88 billion “Addressable US Big Data/Business Analytics” TAM, but I don’t put much stock into these estimates as they are just too large and too squishy to be able to draw a concrete readthrough to RDVT. Instead, I choose to look at how competitive products sold by public companies have grown and developed over time. These products together do billions in revenue each year and at the end of the day, RDVT only needs to achieve a small fraction of what these competitors do in order to be a successful investment.
There are several products out there that are roughly competitive to RDVT’s idiCORE (some cater more to the private investigator community while others are broader and cater to risk management for enterprises as well – the direction that RDVT is headed). Notable products include TLO (owned by Transunion), Clear (owned by Thomson Reuters), and Accurint (owned by LexisNexis/RELX Group). Below are some public data points from each that give me a rough sense for the opportunity RDVT has ahead of it.
• TLO/Transunion TLO is now a core product and growth driver of TRU’s USIS segment which did ~$1.5Bn in sales in 2018 and grew at a 14% CAGR organically 2016-2018.
• Clear/Thomson Reuters Clear is one of a handful of products TRI sells in its Legal Professionals & Corporate segments, which together do ~$3.5Bn in sales.
• Accurint/LexisNexis/RELX Group (REL): LexisNexis today is a fairly broad suite of data analytics products that does ~$5Bn in sales and grows organically in the MSD area (comprised of their Risk & Business Analytics segment that does ~$3Bn in sales and grows 8% organically, and their Legal segment that does ~$2Bn in sales and grows 2% organically).
My key takeaways from these incremental pieces of information from competitors are as follows:

  1. There is a very real and very large market here. RDVT’s addressable market is not one that management hopes will appear over time – there is clearly a lot of demand out there today
  2. This market’s growth is secular, not cyclical , and should show durability for years to come – even in a recession scenario
  3. Given the sheer size of these competing products, I would not be surprised at all if RDVT over the long run is able to generate multiple hundreds of millions, if not billions of dollars in annual revenue
  4. While RDVT only sells two products today , there is ample demand to expand into adjacent data fusion applications over time.

A question you might have now is: “if the market is so large and the economics are so attractive in this market, why don’t more tech companies copy them?” My discussions with management on this point suggest the core barriers to entry here are (1) there are only a handful of people on the planet that know how to build a robust and market-leading data fusion business and one of them – Ole Paulsen – is leading RDVT’s technical product development, and (2) nothing that RDVT has built thus far is off the shelf – they have literally built their own programming language for the product themselves. This creates an immense moat around their business . The only way a large competitor could reasonably enter this business without drawing a a ton of attention would be to buy RDVT outright.

Management believes revenues could grow more than 100% in 2020 ($60 million).

idiCORE Assumptions
• idiCORE will likely end 2019 with ~4.6K customers on average through the year, up +1.3K y/y vs 2018. Given that much of the proceeds from RDVT’s recent $7.5m capital raise will go towards sales reps and engineers, I assume this can accelerate to +2K customer adds in 2020, +1.5K adds in 2021, and +1K adds in 2022. Average revenue per idiCORE customer in 2019 will be about $5.8K, up about 30% y/y vs $4.4K in in 2018. I assume this metric can continue to grow at a ~25%/year clip, bringing avg revenue per customer per year to ~$7.3k in 2020, ~$9.2K in 2021, and ~$11.5K in 2022.

FOREWARN Assumptions
• Average # of FOREWARN users for 2019 should come in around 22,000 – a 15,000 increase from 7,000 users in 2018. I assume this trend holds in the near term and FOREWARN users increase by 15,000 in 2020 and 10,000 in each 2021 and 2022.
• FOREWARN pricing is roughly $20/month/user for unlimited use and I assume this rate is constant over the entire projection period
Putting these assumptions together gets me to revenue estimates of $57m in 2020, $86m in 2021, and $118m in 2022. One way we can cross-check whether these estimates are reasonable is by looking at the productivity of RDVT’s sales reps. RDVT now discloses enough information to calculate this – as of 3Q19, each sales rep was able to generate about $700,000 in annualized sales while costing RDVT about $150,000 per year. Note that the annualized sales generated per rep should continue to grow over time as RDVT’s products get further embedded into customers’ workflows and usage rates per customer naturally increase without incremental sales efforts. Let’s assume RDVT uses half of its recent $7.5 million capital raise to hire new reps at $150,000/rep and let’s assume that sales rep productivity increases to $1.0 million/rep within the next 6-9 months (it increased from $450k/year to $700k/year in the first 9 months of 2019). This would get us to a sales force of almost 75 reps, each pulling in $1m in annualized sales by around mid-2020 (takes 3-6 months for a rep to get to full productivity). This suggests that RDVT doing $75m in annualized sales within the next year or so is absolutely within reach and that my estimates for $57m sales in 2020 and $86m sales in 2021 are certainly not unreasonable.
Now that we’re directionally comfortable with our estimates for RDVT over the next few years, let’s get to the fun part: figuring out how much this stock is worth. For one, if you blindfolded me and told me you had a company that (1) had an asset-light, recurring-revenue software business with a large TAM, (2) had a well-experienced and well-incentivized management team, (3) had revenues that were set to double next year w/ strong DD growth for years beyond that, (4) had 60% gross margins that were set to expand to a steady-state 80-90% within the next year, and (5) was on the brink of sustained operating profitability and then asked me what a fair price for it was, I’d say easily 7-9x NTM sales… If you then told me that that same company was trading for only 3-4x NTM sales (which RDVT currently is) I’d be trying to hock everything in my house that wasn’t nailed down so I could buy more shares.
This management previously sold Seisint to LexisNexis for 7x sales and 17x EBITDA when the business was doing $115m in sales and $45m in EBITDA. By simply applying this same valuation to our 2021 estimates for RDVT, we get to a $55/share price target.
Primary Risks To The Thesis (And Possible Mitigants)
Retaining Talent
This is clearly a competitive space given the size of the TAM and the expertise required to build and maintain the business. While RDVT’s official headquarters is in Florida, their development offices are in Seattle which is a hub for software talent.
Supplier Risk
Given that the lifeblood of RDVT’s business is the source data it acquires, there is some risk that could arise from the reliance on data suppliers. That said, I’m sure RDVT management is experienced in dealing with the needs and concerns of data suppliers given how long they’ve been in the business for. Plus, RDVT’s annual reports disclose each year how much longer their largest data supply contracts are for and that figure seems to get pushed out each year.
Litigation Risk
As with any business, especially those in competitive markets, litigation risk may arise in the future. However, RDVT’s CEO is a lawyer by training and is a good person to have at the helm in this regard.
Getting Google’d
Google has the ability to close a 10-year lead very quickly with its vast resources and brain power. That said, I haven’t seen anything from Google or other Big Tech companies that might suggest they are working on developing a product that would directly compete with RDVT. If such news were to arise or if I start to see a tangible degradation in RDVT’s tracking metrics, I would reassess the thesis

• Continued revenue growth and margin expansion
• New product launches
• Analyst coverage / institutional attention
• Increased & continued communication btw mgmt and investors
• Potential Russell 2000 inclusion if all goes well


Part 5

Link to that article is here.…

Feb 2020 – Post by tommy tripod

Red Violet is a data-fusion software business based in Florida but with their tech division in Seattle. Their flagship asset is their “CORE” technology platform which fuses otherwise siloed data sets (i.e. property records, criminal records, court records, employment records, motor vehicle records, social media and on and on) into a single contiguous data set that can offer a complete view of just about any individual in the country.

Here are the main investment thesis points:

Tremendous sales growth

Here are RDVT’s quarterly YoY revenue growth figures:

**Q1 2018 - 112%**
**Q2 2018 -   96%**
**Q3 2018 -   89%**
**Q4 2018 -   74%**
**Q1 2019 -   72%**
**Q2 2019 -   85%**
**Q3 2019 -   89%**
**Q4 2019 - reports March 5, 2020**  

As you can see, the business has been growing at a pretty impressive clip over the last 7 quarters.

But that’s not even the best part…
The beauty of Red Violet’s business model lies in their fixed-cost structure . Their primary cost of creating their product is acquiring the source data, which is bought by RDVT under multi-year contracts with a fixed pricing schedule. That means that after the product is built, which it is, every incremental sale is essentially 100% profit margin .

Expanding Gross Margins
Here are RDVT’s quarterly gross profit margin figures:

**Q1 2018 - 39%**
**Q2 2018 - 47%**
**Q3 2018 - 49%**
**Q4 2018 - 51%**
**Q1 2019 - 53%**
**Q2 2019 - 59%**
**Q3 2019 - 62%**
**Q4 2019 - reports March 5, 2020**  

As you can see, gross profit margins have been expanding at a steady clip over the last 7 quarters as well thanks to the fixed-cost business model. Management believes that gross margins will peak and stabilize in the 80-90% range once they achieve a 50MM run rate (which could be achieved in as soon as one year).

For good measure, here are RDVT’s free cashflow figures (in millions):

**Q1 2018 - (2.8)**
**Q2 2018 - (2.4)**
**Q3 2018 - (1.6)**
**Q4 2018 - (1.2)**
**Q1 2019 - (1.2)**
**Q2 2019 -   0.1**
**Q3 2019 -   1.5           (18% of revenue)**
**Q4 2019 - reports March 5, 2020**  

As you can see, RDVT has recently become free cashflow generative. The trajectory has been fairly steady, and there is no reason to believe that this trend will not continue well into the future.

It should also be noted that, according to the balance sheet, RDVT has 13.3M in cash and zero debt.

The current RDVT management team is highly experienced in this industry. I would go as far to say as their experience is unparalleled. They also clearly believe in the business, as insiders own 23% of the business. They also have plenty of experience in negotiating buy-outs, which I hypothesize will most likely be RDVT’s ultimate fate.

These are just some of the main points. For a more complete analysis of RDVT, you should really read the terrific SA article written by VG capital (linked below).…

Saul: That’s the article that’s summarized above. I hope that you found reading this rewarding.



very interesting company Saul.
thanks for sharing and writing this detail.
I came across RDVT at MicrocapClub couple of weeks back and got in a tiny position (0.5%) to learn more. Your getting in and sharing this level of enthusiasm certainly helps.

For what its worth, I have two concerns why I didnt build at-least 2% position.

  1. On MicrocapClub, there are some concerns about backers of the company / management… Specifically previous chairman that resigned in Sept AND also current CFO having been a cheerleader in previous companies when they were really not going well.

Current CEO and CFO have <5%, more like 3% holding which also concerns some investors. Its less of an issue for me.

There were also some questions on customer rating on these products.

I have not had enough time and inclination to dig into these… I hope to get more knowledgeable about these in next few weeks.

  1. More importantly - I am not convinced on sustainable moat.
    I see RDVT sourcing data from third parties… this is not a new business or business model… they have done a great job at integrating multiple third party data… however, some of their large competitors have access to same third party data and I would also think some smaller competitors can do so as well. so they can be compressed on pricing even if they offer better solution…

hope to learn and share more with time.
thanks again Saul.


Av daily volume 62 thousand, at present 145 thousand. It’s called the Saul affect!!!


Ok so do your own homework on this name before deciding to invest.

My skepticism meter went up when I saw the company headquartered in Boca Raton, FLA. Let’s just say that I’ve had personal experience with Boca Raton since the 1980’s. I’m not getting into details here, but it’s sort of the Nigeria of the US. Lots of history with penny stocks and pump and dump schemes.

I then looked at who’s holding the stock. Biggest shareholder is a guy named Michael Brauser. He has a personal website. He’s also been chairman of the board of several companies. All very small micro caps with a history of bad reviews and lawsuits. Pump and dump scams. Sometimes the same company that keeps changing its name.

Look up Flint Inc. for one, stock symbol FLNT. I think it was called Convit before that.

I did about 30 minutes of searching Google on one shareholder and found enough dirt to stay away. Haven’t looked at anyone else on the list.

I’d be carful with this one. Sorry Saul. And I could be very wrong about the company, but one player with the most shares at the top of the list has a very checkered past.



My skepticism meter went up when I saw the company headquartered in Boca Raton, FLA. Let’s just say that I’ve had personal experience with Boca Raton since the 1980’s. I’m not getting into details here, but it’s sort of the Nigeria of the US. Lots of history with penny stocks and pump and dump schemes.

I really like most of what I see when it comes to Saul’s company selections and cannot thank him and this board enough for a number of companies that I now hold in my portfolio - but as soon as I saw HQ in “Boca Raton” I was taken aback. Its just as TMB says - simply do a search for pump and dump scams Boca Raton.…

Also the CEO is an attorney, odd for a tech company, and engineering is in Seattle - why isn’t HQ in Seattle?…

I hope this works out for everyone but I felt with all the great info I consume on this board I should at least point this out as a potential problem

Frank - see profile for all holdings


Sorry it’s Fluent Inc. not Flint.

Not trying to step on toes, just sharing information that I think needs to be shared.


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In other investment scenarios, I have used search engines to look for user and industry reviews of the product, and employee reviews of the company. Kind of like how many here refer to Gartner reports for our SaaS companies. I couldn’t find anything other than press releases and investor material on Forewarn and Red Violet. Nothing on TrustRadius either.

Perhaps someone knows some real estate people who use the services and can tell you how much it costs and how well it works? Most of the “news” on the company takes the form of “Forewarn partners with so and so to protect realtors from crazies”. I assume that is a background check based on a name and location of someone about to meet an agent in an empty house. Useful service, and yes, it can be used in adjacent worlds. How much, and how easy are they to deal with? My company actually uses “how easy do our customers say we are to deal with” as part of our bonus structure. Its that important.

Disclaimer: I am long RDVT, small amount, based on usefulness of that business idea, growth potential and Tripod’s initial review. And thanks Saul, for all that work you put in.

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So here is a thread to a lawsuit involving Michael Brauser when Fluent Inc. was called Cogint. You can guess why the name change more then once. Many stories I search have been taken down. You see a headline and click on it and it’s marked “expired”.

Bottom line this Michael Brauser is very dirty. I know a couple of dirty guys out there and they have the exact same kind of personal website claiming to be a family man, community member, faith based, very charitable. His is exactly the same as those.

As the biggest share holder of RDVT, con artists that tend to work with con artists, again just be careful and at least do your own due diligence.…



Sorry again.




One of my favourite lines from the VG Capital report:

TLO was put up for sale during the bankruptcy process which sparked an all-out bidding war between several very large competitors, including LexisNexis and TransUnion (TRU). After 20 straight hours of bidding, TRU won the auction with a bid of $154m (LexisNexis was about to up their bid to $180m but got timed out by the attorney overseeing the process).

I’m positive that is all completely verifiable.

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I agree about having concerns with RDVT. Yes, the numbers on RDVT look impressive right now. But the question is, how long is this sustainable? It really depends on how much you trust management, right? There was a stock once discussed on here called Parateum (TEUM). It was a microcap with great numbers too and went on a phenomenal run, until it didn’t. There was a short attack on the stock and it’s now a penny stock which will either be delisted from the Nasdaq or they will have to do a reverse stock split. This reminds me of HMNY which bought MoviePass and also had great numbers and a phenomenal run, until it burst. The CEOs of TEUM and HMNY promoted themselves heavily and the way they did, some of which you can watch on YouTube, now seems like a red flag to me. And by the way, they’ve since deleted some of those videos; I wonder why?

HMNY did several reverse splits, which wiped out every single investor, and HMNY is now in bankruptcy, in case anyone doesn’t know the story. The CEO of HMNY is a serial entrepreneur who bounces between business and business, all of which have failed. He tries to hide from his past, which is getting hard to do with the internet. Serial entrepreneurs are the opposite of what most of the CEOs here, on this forum, represent. A successful serial entrepreneur is a rare exception (Ray Kroc seems to have been one, who successfully capitalized on an opportunity.) I see some of these red flag qualities in common with the CEO of RDVT. He’s got a history with various companies and has been CEO of a company that changed its name and stock ticker. That’s very different than the typical founder-led CEO discussed in this thread. Look at Phunware (PHUN) and Riot Blockchain (RIOT) for other microcaps that had explosive numbers, big runs and a collapse. Those were about blockchain, and the CEO of RDVT has dabbled in blockchain too (see DRGN, Dragonchain); is this a red flag?

I actually had my eye on RDVT, but the CEO has a checkered history. You can watch him on YouTube promoting a different company, and he reminds me of these other microcap CEOs that failed. I’d be very worried that Muddy Waters Research (Carson Block) or Citron Research (Andrew Left) will catch sight of RDVT and attack the stock. RDVT has had an absolutely phenomenal run, from $6 to $26 in about a year! Cramer would call this frothy and would be a seller here, not a buyer (say what you want about him, we’re all human, but he knew the entire market was frothy a few weeks ago, and he’s been proven right). With a stock this high, short sellers will come out like vultures if they see any sign of weakness in RDVT. That’s basically what happened to all the microcaps I’m mentioning. Incidentally, HMNY and RIOT had Florida connections, which is being pointed out as a red flag for RDVT, also located in that area.

Saul, you’ve taught us all so much. You warned us about shady Chinese companies. I feel we must at least try to offer our two cents back, in return. I understand you probably have a smaller number of positions than you feel comfortable with and want to diversify a bit? Why not look back at SQ or SHOP or PAYC or SMAR or EVBG or GH? How about ROKU or TEAM or FIVN or RNG? There are so many solid companies, many of these just had great reports, some even with accelerating numbers. There’s stocks like LVGO, HCAT and AVLR which Bert has written about. MDB is performing like it’s still got a long-term trajectory, even if it’s not the explosive numbers (accelerating numbers can’t last forever, but reliable numbers can continue; isn’t this what Tinker calls CAP? Competitive Advantage Period really seems like a valuable yet elusive metric). Heck, you can’t go wrong with MSFT or ADBE or MA or FB either. I would sleep better in any one of those for a little diversity, rather than a risky microcap (or investment in a different country with external concerns and an economy we may not know much about). But if you did want a little international exposure, there’s STNE, MELI and SE, all which have been discussed here.


As of 2018, the National Assoc of Realtors said there are 1.3 million Realtors in the US. If every one of them paid the $20/month to check out potential homebuyers, that is a total annual revenue of $312 million. Figure some smaller offices will cheat and one or two will buy subscriptions and check for the others. Drop the TAM in US real estate companies to $200 million. Nice big bump from today for Forewarn.

I was able to find some material on IDI on Glassdoor, but don’t have Glassdoor membership. “Great product, terrible company” is the 2017 review. 2019 reviews were more complimentary.

A 2017 article on a private detective site showed about 10% of 400 surveyed use IDI. Bloomberg has a 2016 story, but again, no membership.

At work. Will look more later.


Don’t shoot the messenger! The work that was done in the first place to alert us of this Company was as usual impressive but I seem to recall clearly that Saul said this company COULD be a scam and to tread carefully.
I did and made today just over 8% and for that Saul I am very grateful. Less of a trader over the years but with what’s been going on recently I will take it and run for the time being. I mean 8% in a day… yes please! Oh do we all have short memories!
Again, thx Saul

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Hi Saul,

I have to say when I red your end of portfolio review I had a sneaking suspicion that your unnamed starter position was in RDVT. Glad to hear you also find merits in the business model and the company itself. Looking forward to seeing RDVT discussed more on this board!


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Why would anyone invest in this company making a measly $5-7 million per quarter with all the shenanigans accompanying it???

Practically everyone is doing 40-60% annual returns in your portfolios with companies doing $100-200 million per quarter.

Why does anyone need this element of risk and unknown when your results without it are so stellar?


My skepticism meter went up when I saw the company headquartered in Boca Raton, FLA.

I said it was a tiny company and that it could turn out to be a scam. On the other hand I’m willing to risk 1.5% on it not being one. We’ll see.