Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
This year I was invited to attend the Coffee Micro-Caps conference in Sydney to represent Youth Investment Group . Not only was this a brilliant opportunity for me personally to build on my own understanding on micro-cap investment , it was also a great opportunity to listen to the CEO’s of the micro-cap corporations and there directional strategies moving forward . For young individuals like myself looking to develop their own financial skills , opportunities are limited and I strongly recommend looking into attending the next Coffee MicroCaps conference .
What is a Micro-Cap and what yields do they hold ?
A micro-cap company is typically a listed company with an estimated market capital valuation of $50 million to $300 million . These companies usually hold a share price under $1 however there are micro companies that post higher share values . The brilliance about micro-caps is that they hold some of the highest yields in stock market returns . Some examples of succesfull micro caps are A2 milk and Goodlife networks , which if you backed in their early stages really paid substantial returns . One of the most interesting points from the conference in my opinion , is that micro-caps will generally perform well no matter what the economic condition is .
How to spot a quality micro-cap investment ?
The key elements in finding a quality micro-cap investment include breaking down the financials such as it’s liquidity ,making sure its cashflow is positive with low-zero debt , no insitutional ownership and ensuring the revenue is growing aswell as its total earnings . The best performing micro-caps will hold a low Beta , as economic conditions will not effect the growth of the company nor the demand for their product or service . For smaller investors it is important when breaking into the micro-cap industry , by using online articles aswell as financial reports will enable you to make a educated decision on whether the share price will grow or mature at its current price . For larger investors, meeting face to face with these corporations is essential to understanding the strategic directions aswell as its current financial position .
My top 3 micro-cap companies from the conference
Alcidion Group Ltd (ALC $0.22) – My personal favourite from the conference . ALC is a Australian Health Care company that specialises in IT processes . It is no secret that the Australian Medical IT system has its flaws , especially how inefficiently medical records are stored . Alcidion aims to revolutionise the way medical records are stored , ensuring that hospitals and medical proffesionals can communicate in the most effecient way possible . ALC has a current market cap of $220.67 million, posting positive operation cashflow aswell as possibly entering the NZ and UK markets . I will be writing an article on this company in the coming weeks however I strongly advise investors to look into this company as they have a product that most certainly could change the game and provide massive yields long term. However, this is not advice and extensive research should be conducted before investing.
Kyckr (KYK $0.20) – A data specialist that compiles financial company data into a search engine that can help with cracking down on money laundering, fraud and tax evasion . There data systems are host to over 80 million companies over 120 countries . An interesting company that would provide huge yields if its subscription models become a success .
Clime Investment Management Limited (CIW $0.52) – Posted a $23 million return to investors , with Earnings per share up 1.3% in 2017 to 2.3% in 2019 . The most interesting part about this company explained by CEO Rod Bristow is its integration of Culture , Compliance and Clients . This model resonates with the modern day business ethical requirements , with many customers in the financial industry losing faith in financial entitys.
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On behalf of YIG , we would like to thank Mark Tobin , the founder of Coffee MicroCaps Conference for the invitation to this event . I highly recommend this event to young investors interested in Micro-caps and there potential yields .
The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Tyger Fitzpatrick , Founder of Youth Investment Group