We are professional stock-pickers. While we may often recommend larger names, we always are on the lookout for small-cap, high alpha opportunities to provide for our subscribers. While there is a more significant amount of risk in small-cap stocks, appropriately sized positions that maintain portfolio diversity can provide solid risk-adjusted returns. Real Networks (RNWK) is a tiny name with no sell-side coverage and a complicated history that impedes investor attention from the exciting parts of the business. Thus, we’ve endeavored to make this article a comprehensive source of information on the stock and its uniquely experienced management.

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Real Networks is a small-cap name with a very outsized history. While this stock may look like a low-dollar, high-risk name with poor prospects, we took a closer look. After nearly being de-listed following a long, losing slog in digital media the company has done a true pivot toward exciting technology. In addition, the financial momentum is all moving in the right direction. After shedding Napster the company’s profit margin is 77%. EBITDA loss has been moving in the right direction for six consecutive quarters and the company will likely be cashflow positive next reporting period. Valuation look...
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