This little-known AIM stock is run by 'a smart guy', according to Warren Buffett

Eagle Eye Solutions(LSE: EYE) has certainly caught my eye. Not least because its chief executive (appointed in September last year) has been described by none other than legendary investor Warren Buffett as "a smart guy".

Listed on AIM in 2014 with a placing at 164p a share, this little-known company -- which released its annual results today -- is currently trading at 242p, valuing the business at £62m.

Eye on the prize

Eagle Eye is a technology company that validates and redeems digital promotions in real time for the grocery, retail and hospitality industries. Its current 233-strong customer base (up from 219 last year) includes such notable names as Tesco, Asda, J Sainsbury, John Lewis, Marks & Spencer, Ladbrokes and Pizza Express.

The company today reported a 71% increase in revenue to £11.1m for its financial year ended 30 June. It also said: "The board is excited and confident in Eagle Eye's capabilities to exploit the considerable global market opportunities in 2018."

The man at the helm -- Warren Buffett's smart guy -- is Tim Mason. A guru of strategic marketing and customer loyalty, he was instrumental in launching Tesco's formidable Clubcard and transforming its customer data analysis. With this pedigree, it's hard to think of anyone better equipped to develop Eagle Eye's business (I disregard the poisoned chalice handed to him of leading Tesco's expansion into the US.)

Genuine growth opportunity

The company is at the early-growth stage and is currently lossmaking (a £2m operating cash outflow and £1.6m spent on investing activities) but a gross margin up 9% to an impressive 88% means operational gearing should kick in big-time as revenues grow.

Revenue growth could be tremendous, because it seems that current significant customers will only "begin to transact through the platform at scale" in the coming quarters. This, together with new contract wins and renewals, suggests there's a very strong demand for Eagle Eye's technology.

I'm not generally keen to invest in lossmaking companies. However, the strength of the management team, signs that this is a genuine growth opportunity, and what I view as attractive multiples of 5.6 times trailing sales and four times current-year forecast sales, lead me to rate the stock a 'buy' at the riskier end of the investing spectrum.

Wonderful company at a fair price

A long-established (founded 1908) and rather less speculative AIM stock I'm keen on right now is £640m cap Nichols(LSE: NICL). This soft drinks business is not only superbly managed, but also has other Warren Buffett-type qualities.

It has strong brands led by its flagship Vimto, good profit margins with an operating margin in excess of 20%, and delivers a high return on equity having averaged near to 30% over the last five years. It also has great balance-sheet strength, with £29m cash and no borrowings, and a tremendous record of double-digit earnings growth.

At a share price of 1,740p, Nichols trades on a current-year forecast multiple of 24.6 times earnings, falling to 22.6 next year. This isn't cheap but neither is it outrageous for a quality company in a defensive sector. I rate the stock a 'buy' on the basis of Warren Buffett's maxim: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

Could there be an even better growth prospect?

Of course, Nichols and Eagle Eye aren't the only growth prospects in the market today. Indeed, a stock in an altogether different industry has caught the eye of the Motley Fool's experts in a big way. What's more, they've published a compelling analysis of the company in question in a FREE without obligation report called A Top Growth Share From The Motley Fool.

This under-the-radar company has confounded the market for years by consistently exceeding the growth priced-into the shares. And our analysts reckon there are good reasons to be confident it will carry on doing so.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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