Terrorist attacks. Mass shootings of civilians. Wars burning the Middle East…with more on the horizon. The news confirms every day what the public has long been suspecting – that the world is getting more and more violent. And as the world’s safety continues to plummet, the demand for security services rises faster and stronger than ever. A highly-organized, growth-oriented, small-cap security services company is about to reap the rewards of this increasing mayhem…
After screening many dozens of rising players in the fast-growing security services space, we have found the one. A company that is about to unleash a unique business strategy to dominate this fragmented, but highly profitable, $39.1 billion industry. A company that could become to security what Microsoft is to software, and Amazon to online retailing – the undisputed leader.
The company in question is Custom Protection Services Inc. (OTCMKTS: CSPS), a pioneer in the field of protection and security services tailor-made to both corporate and individual client needs. The company offers VIP families and businesses a wide range of protection services and crisis management solutions including:
- Risk Analysis
- Personal Protection
- Crisis Response
- Guidance & Strategic Planning Services
- Maritime Protection
- Travel Security
- Legal Investigation Services
- POA Security Programs
Client contracts cover everything from hourly to multi-year commitments spanning the globe – and this business is big and getting BIGGER…
It is not an exaggeration to say the sector is on a strong growth path as the world becomes increasingly dangerous:
The global Managed Security Services (MSS) market in the U.S. is expected to grow to 47.65 billion by 2023 – an increase of 21.9% in only three years.
CSPS lies at the revolutionary intersection of a volatile global security situation and a highly fragmented industry in desperate need for consolidation. And when this kind of industry is in a growth mode, something very predictable happens – billion-dollar companies (and stock market fortunes) are made. The security services niche is now at a future-defining crossroads as:
- High-net worth individuals and large corporations are scrambling to fulfill the skyrocketing growth in their security needs
- Investors are impatient to find the growth leader and dominator of the industry in the months and years to come
And by fulfilling these two enormous unmet needs, CSPS could bring investors a potential record return.
Customer Protection Service’s “Buy & Build” Strategy – The Game-Changer of the Security Services sector
Security services are highly fragmented. An estimated 8,000 to 10,000 companies operate in the sector in the U.S. alone. The three top players have revenues of $11.5 billion combined, leaving the remaining $28 billion up for grabs. Especially when considering that a staggering 7,720 firms in the sectors have revenues of less than $5 million:
This is where CSPS steps in.
The company has revealed its plan to unleash an aggressive “buy and build” strategy to purchase and integrate up to 4 other security companies every year. And CSPS has in mind only targets with the best characteristics:
- Successful operations for 5+ years
- Gross revenues of between $5-$10 million annually.
- Gross margins greater than 50% or net margins greater than 7.5%.
- Net annual cash flow sufficient to repay any debt within two years after acquisition.
Because the simple reality is that consolidating fragmented industries is a proven blueprint to make millions – if not billions. A whos-who of the world’s top billionaires have made absolute fortunes by following this formula, including:
- Wayne Huizenga – Who amassed a $2.6 billion fortune by consolidating the waste management and auto dealership industries through Waste Management Inc. and AutoNation, respectively.
- Sam Walton – Who by consolidating small grocery stores around the country created Walmart, making him the richest man in America.
- Lakshmi Mittal – The Indian magnate who accumulated an $18.6 billion fortune by buying up small steel mills around the world, and turning them into the behemoth known as ArcelorMittal
CSPS is about to do the same in security services.
And, as you might expect, industry consolidators historically generate enormous profits for investors in relatively short time periods:
|89%||March-August 1995(5 months)|
|577%||May-August 1995(3 months)|
|1,110%||April 2003 – Dec. 2004(20 months)|
Outside of the U.S., the market for consolidation is huge – and totally untapped. In most countries of the world, the number of private security workers outstrips that of police officers:
After gaining a leading position in the U.S., CSPS can simply continue cloning its strategy abroad – eventually becoming a billion-dollar company. And CSPS has all the ingredients needed to make this happen…
CSPS And Its Unrivalled Triple-Whammy Advantage
CSPS is perfectly positioned to accomplish its ambitious U.S. and international growth goals. It’s know-how, quality focus, and experience constitute an enormous advantage:
- The CSPS management team has an unparalleled combined 100+ years of experience in the sector, covering all areas of the business in full. CEO DeLane Potter has specific experience in the private security and corporate sectors, John Kuykendall is the CFO and a CPA, bringing to CSPS a strong corporate experience. President George Rutherford has decades of international experience and security operational experience, in addition to specific experience in corporate security.
- CSPS only sources consultants and employees from the élite of America’s security services, law enforcement agencies, and military institutions. This includes personnel from the US Navy Seals, US Special Forces, Marine Corps, Naval Operations Special Units, FBI and CIA. Literally, the best people for the job anywhere in the world.
- CSPS management has devised and is about to implement a devastatingly powerful growth strategy that will take it to all 50 states – and beyond. By leveraging the power of strategic acquisitions, CSPS should be able to secure a chokehold on a fragmented sector, boosting its economies of scale and margins. The end result – a security conglomerate with brand recognition profitability that leaves competitors in the dust.
As CSPS readies to implement its strategy in 2020, savvy investors are about to take notice…
Catalysts – The Fuel Of A Stock Market Winner
The last months have been a hotbed of activity for CSPS. The company has in the last weeks begun to announce its growth plans and revenue-generating initiatives:
- On January 7th, the company announced that it had been designated the primary security provider by a leading property management company managing over 30 residential communities located throughout the State of Texas. This one appointment represents a potential revenue of over $10 million annually.
- On January 20th, CSPS announced an extremely ambitious plan to develop new service contracts within the US domestic market through a targeted advertising and marketing campaign. In addition, the company is seeking to co-list common shares for trading in Canada and Europe, identify and close 2-3 suitable acquisitions, and exceed a revenue target of $7.5 million.
- On January 21st, the company announced that it is in the stages of finalizing security services contracts with 17 wedding & entertainment venues, a mobile phone franchise with 10 retail locations, a pizza franchise with 29 locations, and a grocery store chain with 200 locations. This initiative alone could generate up to a massive $7.5 million in revenue in 2020.
In addition, the company plans to shortly begin reporting with the U.S. Securities & Exchange Commission – which will inevitably put it under the radar of more and more institutional and private investors. This is likely to happen by the spring.
CSPS Is An Overlooked Security Services Play – But For Not Much Longer…
CSPS has a stock price of approximately $.50 and a total of 54 million shares outstanding, giving it a market capitalization of around $27 million. In simple words, it takes only a minimal amount of investor buying to propel the stock upwards. It would take a minuscule fraction of the $17.7 TRILLION invested in global equity funds to cause a tidal price gain in a stock like CSPS – in the space of weeks, rather than months. What’s more, the public float of CSPS is extremely small – only 1.7 million shares are available for trading, worth less than $1 Million.
With revenue projections for 2021 and 2022 of $19.3 million and $48.2 million, respectively, and margins estimated at 21%-23%, CSPS could reasonably earn $4.11 million in 2021 and $11.9 million in 2022:
Applying the average multiple to earnings (P/E ratio) of other sector players could make the company worth easily between $61.2 million and $182 million:
|Company||Earnings||P/E Ratio||Market Cap|
|€159 million||14.6x||€2.37 billion|
|$170 million||16.9x||$2.88 billion|
|$70 million||14.4x||$1 billion*|
|$4 million||15.3x||$61.2 million – $182 million|
Gains could happen quickly, as investors realize CSPS is embarking on a path of explosive revenue growth from a very small base, and in a fragmented market – the recipe of billion-dollar stock market success stories…
CSPS: The Perfect Consolidation Play With Significant Upside
CSPS is a relative newcomer to the listed equity markets. This means that it is still flying below the radar of investors. As the company continues to gain more contracts and completes strategic acquisitions, its name will start circulating among investors and investment managers. This will have an inevitable effect – greater interest in the company and its shares.
The moment investors realize the winner-takes-all potential of CSPS’s unique strategy, investment money will pour in. And with its low valuation and expanding revenue stream, investors in CSPS could be in for a record windfall in the space of only a few months.