Rakon - a Significantly Undervalued NZX Listed Technology Company

Rakon Limited [RAK.NZ] is a New Zealand based technology company that designs and manufactures high quality frequency control solutions. The Elevation Capital Global Shares Fund has owned shares in Rakon since 3 July 2019. The underlying business is performing well, Rakon has posted positive free cash flow in four of the last five years and with 5G demand ramping up globally the company is well positioned to continue to experience growth.

There are two ways companies return value to shareholders: (1) cash distributions and, (2) share price appreciation. Rakon has not delivered on either of these metrics in recent times. Elevation Capital has called on the Independent Directors to improve shareholder communications and market engagement given the positive outlook for Rakon.

After attending the ASM on 7 August 2020 and delivering this message in person, we are now convinced that the company is listening and the underlying investment thesis and positive outlook is firmly intact. We expect Rakon to add meaningful value to the Elevation Capital Global Shares Fund in the years ahead. 

To read our full report, click here.