Changes to Select Portfolio…MTBC in, Trimming MARK

We have made two changes in the Tailwinds Select Portfolio.

MTBC added to the Portfolio. Our discipline is that new names get added to the Portfolio at an average weighting. Since we now have 15 stocks in the Portfolio, MTBC is 1/15th of the total.

What do we like about MTBC? Here’s some bullet points on the Company…there will be more in the future.

  • Strong, conservative management team.
  • Just turned the corner to EBITDA positive in the last year and there growth here is accelerating.
  • Best technology in the industry. Development team in Pakistan gives them great scale at a very reasonable cost.
  • Lowest cost provider in their industry.
  • Winning new business. One of the keys here is they now have a sales team with their last acquisition, having never had one before. And, their TalkEHR platform is driving business.
  • Industry ripe for consolidation. As a public Company, they have a platform to consolidate numerous competitors.

MTBC reminds me of FSNN when it was added to the portfolio; a platform for consolidating an industry, with leading technology, low cost, and a solid team. I wouldn’t be surprised to see them make a transformative acquisition now that they are reaching scale.

MARK trimmed by 2/3rds. Remark has been nothing short of remarkable in terms of performance since being added to the portfolio about 2 months ago. With a return closing in on 300%, the position has grown to be too big while the valuation is no longer dirt cheap. Thus, we are taking the position down to an average sized holding.

The funds raised from the sale of Remark are being used to purchase our position in MTBC, with the balance going into cash. We anticipate adding another name to the Tailwinds Select Portfolio very soon.

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    • No. I think this is a multi-year play on consolidation in this industry. They have a technology lead and I’m willing to monitor their growth strategy over time. Great management team.

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