Marvelous Microcaps

Radiant Logistics, Inc.: Third-party logistics company providing multi-modal transportation and logistics services

INTRO:

At Perritt Capital Management, we take focused positions in companies where we have high conviction of their success; companies that are out of the mainstream of small cap investing. To highlight our process, we are pleased to present the fifth installment in our new series “Marvelous Microcaps – Big Ideas on Small Companies”. This series profiles companies that we believe have a niche in their existing markets or are launching a product that could disrupt their marketplace.

THE COMPANY:

Radiant Logistics, Inc. (RLGT) is a third-party logistics company providing multi-modal transportation and logistics services primarily in the United States and Canada. They offer domestic and international air and ocean freight forwarding services, freight brokerage services and other value-added supply chain services. Bohn Crain founded the company in 2005 to execute a consolidation strategy in the transportation and logistics sector. Bohn has extensive experience at Schneider Logistics, Inc., CSX Corporation, and other similar companies. In a world with a volatile shipping environment, Radiant provides best-of-breed services to their customers and partners.

Radiant has consistently focused on bringing value to the agent-based forwarding community. They enable their strategic operating partners to be equity owners in the business. They offer unique succession planning and liquidity opportunities for station owners. Their network participants benefit from RLGT’s increased purchasing power, expanding network of global trading partners and their ongoing investment in technology. Through their shipment tracking tools customers can know exactly where their products are at any moment.

WHY WE OWN: THE PERRITT ADVANTAGE

Radiant recently reported second quarter earnings that were stellar. Their industry has been hit with tight capacity and strong demand. New capacity is limited as labor shortages and tight supply chains keep new capacity from coming online. RLGT has had a history of growing both organically and by making acquisitions. They recently acquired Navegate which helps it expand its digital platform and manage international, cross border and domestic freight delivery. Their services include customs brokerage, international ocean and air freight forwarding, domestic truck brokerage, drayage and transload services. Navegate’s proprietary global trade management software platform has been recognized as the “Top 50 Logistics Companies in North America” * over the last several years.

Radiant’s balance sheet is under levered allowing them to make more acquisitions and buy back their stock. In the second quarter alone, they repurchased $4.6m of stock. RLGT plans to use roughly 50% of its free cash flow to repurchase more stock and make additional tuck-in acquisitions. Their stock remains cheap relative to their peers, trading at 4x AEBITDA. Radiant has a strong management team and slim cost structure will help enable them to possibly grow revenue and increase margins. In addition, some of their hard-hit verticals, such as trade shows and retail store fixturing are returning to normal allowing further growth.

 

Perritt.  Marvelous Microcaps – Big Ideas on Small Companies.

 

Data here is obtained from what are considered reliable sources; however, its accuracy, completeness, or reliability cannot be guaranteed.

*Radiant Logistics recognized by Transport Topics – Radiant Global Logistics.

Free cash flow is the cash left over after a company pays for its operating expenses and capital expenditures
AEBITDA – Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization is a measure of a company’s profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base.

Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.  Please click PRCGX and PREOX for a list of the top ten holdings.

Before you invest in the Perritt MicroCap Opportunities Fund or Perritt Ultra MicroCap Fund, please refer to the prospectus for important information about the investment company, including investment objectives, risks, charges, and expenses.  You may also obtain a hard copy of them  prospectus by calling 800-331-8936.  The prospectus should be read carefully before you invest.

Mutual fund investing involves risk.  Principal loss is possible.  The Funds invest in smaller companies, which involve additional risks, such as limited liquidity and greater volatility.  The Funds invest in microcap companies which tend to perform poorly during times of economic stress.  The Ultra MicroCap Fund may invest in early-stage companies which tend to be more volatile and somewhat more speculative than investments in more established companies. 

Past Performance does not guarantee future results.

The Perritt Funds are distributed by Quasar Distributors, LLC.

First published March 2022.

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