Asure Gaining Momentum with its Workplace Software Solutions

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When RedChip followers were first introduced to Asure Software, Inc. (NASDAQ: ASUR) at our November Small-Cap New York Conference, the Company’s stock was trading under $4. Since then, ASUR’s share price has more than doubled, reaching a closing high of $8.85 on January 11.

Those familiar with ASUR’s story shouldn’t be surprised that the market is beginning to assign the Company’s stock a more fair valuation. Asure, based in Texas, provides cloud-based workplace software solutions that manage and automate functions such as time and attendance tracking and enterprise meeting room scheduling.

Below are three reasons why investors should consider building a position in ASUR:

Huge market opportunity: The human capital management (HCM) applications market is expected to surpass $8.1 billion by 2015, according to IDC.

Time and attendance systems represent approximately $1.5 billion of the broader HCM market. Approximately $500 million of the market is composed of small and mid-sized businesses using outdated technology. This sweet spot is ripe for cloud-based solutions such as that offered by Asure.

Another area where the Company is quickly gaining market share is the meeting room scheduling market, which is currently estimated to account for $150 million of the broader HCM market and lacks a dominant player.

ASUR is strengthening its position in the HCM market through strategic acquisitions that expand its industry penetration, improving the Company’s ability to generate referral business from leading partners such as payroll processing vendors.

In the fourth quarter, the Company acquired ADI Time and Legiant, providers of cloud computing time and attendance software and management services. These acquisitions give ASUR penetration into industries that the Company hadn’t yet reached and add further client depth in industries they already serviced.

High-profile client base: ASUR’s products are used by numerous blue-chip multinationals such as Microsoft (NASDAQ: MSFT), GE (NYSE: GE), Lockheed Martin (NYSE: LMT), Dell (NASDAQ: DELL), and McDonald’s (NYSE: MCD). ASUR’s clients also include well-known legal, education, and healthcare organizations, including the American Red Cross, MD Anderson Cancer Center, Cornell University, and Duke University.

Classic turnaround story: When its current management took over in late 2009, they took ASUR from a substantial operating loss to profitability by divesting nonperforming business lines and implementing other cost-control measures. This impressive turnaround reflects the skill and expertise of ASUR’s executive team. With these measures in place, 2012 should be an even stronger year for ASUR. The Company recently raised its 2012 revenue and EBITDA guidance to $18.0 million and $4.0 million, respectively.

While the market is beginning to recognize these catalysts, as evidenced by the recent run-up in the Company’s share price, ASUR still trades at a steep discount to its peers. In fact, at today’s prices the Company trades for barely more than 2x its trailing sales while companies such as Salesforce.com (NYSE: CRM) and Concur Technologies (NASDAQ: CNQR) trade at 6x to 7x trailing sales.

Going forward, ASUR expects to achieve annual organic revenue growth of 20% to 25% with gross margins of 20% to 25%. With more than 80% of ASUR’s revenues being recurring payments from customers, the Company has a stable foundation from which to grow market share.

ASUR’s high growth potential, blue-chip client base, and intriguing turnaround story make a strong case for investing in this rising tech stock. You can learn more about ASUR by watching the Company’s presentation from our latest virtual conference.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.