Thanks for putting the time and effort into this analysis.I...

Thanks for putting the time and effort into this analysis.

I think it pays to compare companies with similar business models operating in similar markets. I bought into two such companies about three years ago. Cirrus was one of them. Firstly, you mentioned that Cirrus is clearing about 1% of its gross revenue down to the bottom line ($1 million retained from $95 million revenue. This is the same for the other company: $9.4 million NPAT from $857 million gross revenue.

Also both companies have just posted record first half results.

I sold Cirrus after about six months. I held the other. Here is the graph with both companies. Cirrus is the black line. The blue line with the Bollinger bands is the other company:


The interesting thing is that when I sold Cirrus there wasn't a lot of difference in the share price performance of both companies. The key difference I observed was that Cirrus appeared to have no (or little) strategic vision while the other company was constantly questioning and refining what it was doing: what important new technology directions were emerging, in which markets were they struggling to gain traction, and so on.

It took a couple of years for the strategic vision to start producing results, but you can see the effect kicking in around May, 2019. Both companies got kicked by the global pandemic panic in March/April last year but Cirrus wasn't in a position to take advantage of the newer technologies that facilitated remote working. Of course the heat of this technology is declining now that there is the prospect of people returning to communal workplaces over the next twelve months.

The other thing of note is the other company doesn't appear to have any options on issue. There's an employee share plan, but as far as I can tell that's it in terms of employee equity investment. Perhaps you're right and granting options is ineffective as an incentive.