Revenues, profits, dividends and stock price are all up for 2014 turnaround prediction.

Last year in the Investorfile predictions blog post for 2014 we named out our Top Ideas stock, whose financial results could see a big turnaround in 2014. See: Investorfile strikes big on 3 small cap predictions in 2013; declares 3 more for 2014 – Prediction #3: Caldwell Partners International (TSX: CWL).

Our thesis for this prediction: Caldwell Partners International, an executive search firm with over 70% of revenues derived from the US, was positioned well for the US recovery. With the recent data trend of a stronger US job market, Caldwell Partners' executive search business would be on the upswing and should realize a big turnaround in revenue growth and profits for fiscal 2014.

Fast forward 11 months and we got this call right.

Last week Caldwell Partners delivered its 2014 fiscal year results. Deliver it did. The year prior revenue growth was flat but, in fiscal 2014, revenues grew 33% to $45.1 million. For the year, US revenue was up 43%. Just as important was the turnaround in the Company’s profits. Last fiscal year Caldwell Partners lost money. This year it earned $1.97 million in net income or $0.11 per share. The added bonus: the dividend payout was increased to $0.02 quarterly, a current yield of 5.5%.

The reward (so far): Caldwell Partners' stock price ($1.45) is up 65% since our prediction date last year. Include the dividends, and the total returns are higher.

Investing in undervalued small cap companies that are fundamentally strong can be very rewarding. The rewards are even better when you can identify a turnaround year for financial results in such companies. For post-turnarounds, shareholder value–enhancing events like acquisitions or takeovers generate significant premiums to the small cap’s stock price.

To this point, we feel strongly that any one stock on Investorfile's Top Ideas list (Caldwell Partners included) could be subject to shareholder value–enhancing events in the future.

That said, our next set of predictions for 2015 will be published on the Investorfile blog soon. Who knows? Caldwell Partners could appear on it again.

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This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness. The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.