This month we seek to identify high quality companies with good growth prospects that may be undervalued. We rank UK smallcap technology stocks by EBIT margin, cash conversion, ROA and revenue growth to calculate overall Quality Growth Scores. We then regress these Quality Growth Scores against EV/ EBIT multiples and identify the companies with the optimal combinations of high Quality Growth and low valuations: Alfa Financial Software, Netcall, Fonix Mobile, Dotdigital, everplay, Big Technologie ....
