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As part of our ongoing series at The Acquirer’s Multiple, each week we spotlight a stock from our Stock Screeners that might be a deeply undervalued gem hiding in plain sight. This week’s spotlight is MIND C.T.I. Ltd (MNDO) — a small Israeli software company that provides billing, customer care, and enterprise resource management solutions primarily to telecom and enterprise customers around the world.

Business Overview

MIND develops, licenses, and supports convergent billing and customer care software that helps telecom operators and enterprises manage complex billing, rating, and customer relationships. Its modular suite covers real-time billing, mediation, analytics, and revenue management, giving clients flexibility and scalability without heavy customization costs.

With over two decades of operating history and long-term customer relationships across more than 40 countries, MNDO generates recurring, high-margin revenue streams supported by multi-year service contracts and maintenance renewals. The company also maintains a debt-free balance sheet and a disciplined dividend policy.

What Is IV/P (Intrinsic Value to Price)?

IV/P tells you whether a stock offers more intrinsic value than the price you’re paying for it. The ratio blends earnings power, reinvestment efficiency, and capital-return policy to estimate a conservative measure of worth.

• IV/P > 1 → Undervalued
• IV/P < 1 → Overvalued

MNDO’s IV/P = 2.10, meaning its intrinsic value is estimated to be roughly 110 % higher than its current market price — a strong signal of potential undervaluation. 

Supporting Metrics

MIND’s strong free-cash-flow generation relative to its small market cap highlights its deep-value characteristics. An Acquirer’s Multiple below 4 suggests the market is pricing the company as if its cash flows will decline permanently — yet cash generation has remained consistent for several years.

Revenue & Profitability

MIND’s steady top-line and double-digit operating margins underscore disciplined expense management and recurring license renewals. Despite its small size, profitability has remained positive across market cycles — a testament to conservative management and sticky enterprise clients.

Balance Sheet Strength

MIND operates with substantial net cash and zero leverage, providing both stability and optionality for future dividends or acquisitions. With working capital of roughly US $ 15.6 M, liquidity risk is negligible.

Capital Returns

The company has consistently paid generous annual dividends funded by accumulated cash reserves, returning most free cash flow to shareholders. Its low reinvestment needs make this policy sustainable so long as operations remain stable.

Why MIND Might Be Undervalued

Micro-cap foreign software stocks often trade at deep discounts due to limited liquidity and minimal analyst coverage. Yet MNDO combines clean financials, steady free cash flow, a debt-free balance sheet, and high shareholder payouts. Its IV/P of 2.10 and AM of 3.67 imply the market is valuing each dollar of operating earnings far below intrinsic worth.

Conclusion

With an IV/P of 2.10, an Acquirer’s Multiple of 3.67, and a free-cash-flow yield of about 13 %, MIND C.T.I. Ltd (MNDO) stands out as a disciplined, cash-rich micro-cap compounder trading at deep-value levels. For patient investors seeking steady dividends and downside protection backed by net-cash reserves, MNDO may represent a rare case where a small software business behaves like a durable, income-generating asset.

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