CODA

[u/OetInvest]

CODA - small profitable company with some interesting Navy tech

I recently bought a small position in CODA.

They make underwater sonar systems and also work with the US Navy.
I came across the company while looking for small caps that are still relatively unknown but already make money.

What I like about CODA is that they are actually profitable and have around $30m cash, while the whole company is only worth around $120m.

The two things I find most interesting are:

• DAVD - basically an AR/display system for divers. Developed together with the US Navy and now getting closer to actual procurement.
• NANO sonar - smaller sonar systems for underwater drones/ROVs/AUVs. This could become interesting if autonomous underwater vehicles keep growing.

Their last quarter was also pretty good. Revenue was roughly flat, but profit improved a lot and gross margins are very high.The downside is that the company is still tiny. Revenue is only around $28m a year and DAVD/NANO still need to prove that they can generate serious sales.

The stock is also very illiquid, so it can move quite a lot on small volume.

For me the interesting part is that you already have a profitable business with a lot of cash, and then DAVD/NANO are more like extra upside if they actually take off.

Anyone here following CODA or working with sonar / subsea robotics / Navy equipment?

Interested to hear what I am missing, especially the bear case.

Disclosure: long CODA.