Frustration can't begin to describe what it's like to own certain ASX stocks.
The business is excellent — winning new customers, expanding market share — but the stock price just languishes, or even plunges.
Even with a long-term horizon, your faith is tested.
That's especially been the case with small-cap stocks in recent times.
The economic turbulence from inflation, rising interest rates, and a war in Europe has triggered investors to pull their money out of riskier stock and into larger cap businesses with more stable earnings.
One stock that exemplifies this experience is Alcidion Group Ltd (ASX: ALC).
The hospital software provider has seen its share price plummet more than 72% since June 2021.
But one could now argue that's enough punishment.
Image source: Getty Images
'Disconnect' between company performance and share price
The fact is that the Alcidion business has not done much wrong over that time.
Cyan Investment Management has been a backer of the small cap for a while now, and has been bemused by the way it's been treated by the market.
"Their revenues, earnings and client bases have expanded over the past two years and yet their [stock price has] declined by more than 50%," portfolio manager Dean Fergie said back in March.
"Whilst it could be argued prices did get ahead of themselves during 2020/21, the disconnect between underlying company performance and share price movement cannot continue indefinitely."
Fergie is not alone in recognising the deep value for Alcidion shares.
According to CMC Markets, Bell Potter, Canaccord, and RBC Capital Markets all agree with him, rating Alcidion shares as a strong buy.
Already the valuation for the software maker seems to have turned around, gaining more than 33% since 27 June.
This is why I will consider buying $5,000 worth of Alcidion shares this month.
Late last month, the company's quarterly update was received warmly by the market, with the stock surging 9% higher that morning.
"The record achievement in cash receipts in the fourth quarter builds upon Alicidion's all-time performance last year," reported The Motley Fool's Mitchell Lawler.
"At that time, the company pulled in $14 million to mark a new high for the financial measure."
