Hello everyone! It's Paul here!
As promised, here are my notes from yesterday's talk about small caps at Mello Derby- opportunities & threats. (text follows below)
EDIT: Here is the video recording of my talk, which I hope people find interesting.
To start, I made this checklist, inspired by Mark Minervini. here it is again;
(Ideally, I want to see nearly all items below ticked, before even considering an investment)
PRIME SOAPED
PRODUCT - fulfilling an unmet need in customers. Desireable, with pricing power.
RECURRING revenues ideally, or at least not lumpy
INNOVATIVE company, which launches new products and services - ahead of the competition
MARGINS - should be high, giving operational gearing - big upside when sales rise. Must have some moat also.
ENTREPRENEURIAL management - preferably founders & still big shareholders
SCALEABLE - company must be capable of growing 5x or more (e.g. retail roll outs, cloud-based tech)
ORGANIC growth - strong, and preferably accelerating.(not by acquisitions)
ASSETS - balance sheet must be strong (NTAV)
PROFITABLE - or close to it
EARNINGS estimates - from brokers - should be rising, and repeatedly beaten by actual results
DIVIDENDS - nice to have, but not essential
Other things
Any DOUBTS about business model, management, or accounts, then don’t invest
(Main influence for above list is Mark Minervini - trade like a stock market wizard)
Hello everyone!
Thanks very much indeed to David, Georgina, and everyone else who has organised or participated in this event.
Mello is such a refreshing change from other shows, in that the quality of the companies presenting here is so much better than other investor shows. Also, David has filled the show with POSITIVE ENERGY- what a wonderful thing, and a refreshing change.
EDIT - please note that Mello welcomed the Stockopedia directory of summarised info about exhibitor companies. Why? Because people at Mello (investors and exhibitors) are intelligent enough to understand that the StockRanks system is just one way of looking at the market, which is proven to have a great track record overall, for a portfolio (not individual stocks).
Also, Mello attendees understand that a stock being classified as a "Sucker Stock" is just shorthand for a higher risk investment. I have a big personal holding in Sosandar (LON:SOS) - that is classified negatively on Stockopedia - which doesn't matter to…
.JPG)
