I just wanted to highlight a company from my portfolio, Fathom Holdings. This company came out public this year so I think it is not discovered by institutional investors. It is 375m market cap so I think qualifies for micro cap which I love because it’s not covered by a lot of analysts.

FTHM is in real estate brokerage business. What it does is it tries to bring top notch real estate brokers on their platform and give them majority of commissions to them for flat fee. Here is the the CEO Josh Harley's letter. Look at the table below:

Also this from the letter:

"Our technology company, IntelliAgent, operates as a Software as a Service (SaaS) supporting Fathom Realty and allowing it to operate as a Platform as a Service (PaaS) offering. This allows us to operate in the cloud, essentially eliminating the high costs associated with brick and mortar offices. It also allows us to expand into new markets faster and at a lower cost, allowing us to reach profitability faster."

I mean i do not want to assign any SaaS value. You can do that if you want. My point in this post is not to be precise but to see if it is sufficiently undervalued.

So, if you are a broker why would you stick to traditional brokerage firm? Short answer is you shouldn’t. Last year I invested in EXPI which run up from below 10 to now over 60. But unfortunately for me I did not participate in the run up because I am dumb. I sold too early. Now I came across FTHM and I purchased some shares (average cost is 18.4) but I am not selling. Yet. I am thinking of buying on any share weakness. In my mind there is no reason why this little company shouldn’t be $2b market cap or more then $100 per share.

Well it will not happen just because I think but because i think they have management that can execute on their growth strategy. Its CEO and founder of the company, owns decent amounts of stock and he is laser focused on growing the company. Also the majority of the value creation will come not form the fees they charge the brokers but ancillary services they provide to the customers. You’ll see over time they offer those services to their clients such as title insurance. Btw they just closed the acquisition of Verus title.

I have a house and refinanced twice so far. While I had an option to shop for title insurance I didn’t bother finding one and I will be surprised if anyone does. So i think that add on services will be highly accretive to FTHM

This business is bread and butter. Easy to understand and the growth potential for FTHM is huge.