InvestorOpportunity.com is an information, opinion, news, and research service. We bring to the attention of readers and subscribers insight on various investment sectors and profile selected growth opportunities / companies. Additionally, we cover the facts and insight behind topical events and entities that we believe the reader would be remiss in not knowing about.
We hunt for high conviction buy opportunities in all sectors and marketcaps, however we often focus on micro & small caps because they have more room to grow, and have more potential to deliver extraordinary returns, potentially even life-changing returns. A $100 million marketcap company could grow tenfold and turn into a $1 billion company, and it would still be small enough to explode much higher.
When we do legwork on small caps, we primarily look for four elements…
1) Look for companies without a lot of debt. debt can cut both ways; it can magnify returns or wipe them out. But as a general rule, you want small caps with very little debt, however there are scenarios where the prospects are so bright it makes financial sense to borrow instead of diluting the share structure.
2) Look for talented operators or investors, and it is highly favorable when insiders with serious skin in the game.
3) Look for cheap small caps. That means quality, undervalued companies that are “on sale” for one reason or another. Maybe the stock is having a “Chipotle Moment,” where a great company trades at a discount because of a rare, temporary problem. Maybe the stock is trading under the radar and will excel as the market learns / understands / or appreciates what is developing. Often, the achieving of key milestones with intended results can bring the company to a new level appreciation — knowing what the plan is and how the company intends on executing on it will give you insight on upcoming potential catalysts.
4) Look for growth potential. Maybe the underlying industry is growing, and the company is positioned to ride the wave higher. Or maybe it’s growing through shrewd deal-making.