Semler Scientific: A Deep Dive

Not many people have heard the name Semler Scientific. It trades on the OTC markets, barely qualifies as a small-cap stock, and rarely has a daily trading volume greater than 1,000 shares. I actually saw it only trade 14 times in a single day. Compare that to Tesla, which has 40 million+ shares traded on the regular. Talk about price discovery am I right.

I believe Semler Scientific can be a serial compounder over the next decade. That’s a bold statement, especially because this is my first foray into the small-cap, non-NYSE/Nasdaq territory. But I wouldn’t stray away from my typical $1-$25 billion business if I didn’t have high conviction. And I have plenty of it with this stock.

Below I’m going to outline my investing case for owning Semler (ticker: SMLR) by going through my six-step investing research process. The process is pretty basic, and probably not dissimilar to what you go through if you’re a bottom-up, growth-oriented investor like myself.

Alright, let’s get to it. First up, the basic financials.

Basic Financials/What they Do

As of this writing, Semler has a market cap of $335 million. For the trailing 12 months, the company brought in $29.5 million in revenue, giving them a P/S ratio of 11.3 (latest earnings can be found here). That seems mighty steep for a…