Penny Stocks & Small Caps!

Stocks with an expanding global footprint

Buying companies with a global footprint is increasingly a pre-requisite in small-cap investing. This economy has sluggish growth prospects over the next few years and further falls in the Australian dollar will favour companies with offshore operations. Longer term, successful small caps can quickly outgrow this small market. The best ones think global from day…

5 Small Cap Stocks for Punters

An investment commentator this week likened the sharemarket correction to a department store sale. With the Australian sharemarket down 14 per cent from its most recent peak, it was time to go “bargain hunting” because stocks offered better value. That is simplistic, dangerous advice. Confusing value and price, and anchoring expectations to past prices is…

Nick Scali investors sitting comfortably

There’s a lot to like about companies that quietly get on with the job of growing earnings and improving the return on each dollar of shareholder funds invested. Companies that, with little fuss or fanfare, consistently deliver in good and bad markets. Refreshingly, these companies do not have an army of investor relations advisers trying…

Small cap stock that’s growing quickly

Investors are right to beware small-cap companies that grow quickly through acquisitions. Many “industry consolidators” have come unstuck over the years after buying too many businesses too quickly and integrating them poorly. They had a great story to sell investors: raise capital on equity markets, roll up smaller competitors in a larger enterprise, and apply…

2 Stocks Exposed to Megatrends

Regular readers know this column spends plenty of time on investment megatrends and finding the best stocks to benefits from social, economic or demographic change. The key issue, of course, is company valuation, but the right trend is a powerful place to start. This column’s favoured megatrends include the coming middle-class consumption boom in Asia;…

SeaLink and Ardent share good long-term prospects

Famed US investor Peter Lynch said the best investment research tools were one’s eyes and ears. On that basis, it is hard to miss the scores of Chinese tourists in Sydney’s Circular Quay or Melbourne’s CBD, or the growing number of Chinese bidders at auctions in capital cities. The coming boom in Asian consumption is…

Virtus Health and Monash IVF take a pummelling

Investing in megatrends can capture the imagination. Trends such as the ageing population, growth in Asian middle-class consumers, and urbanisation are compelling. But the hard part is finding undervalued stocks that benefit. Megatrends, by their nature, run for years, and are usually well known and priced into markets. Often, they are overpriced into company valuations…

Market over-reaction to Slater & Gordon

When star stocks are under heavy attack from short sellers or mischief makers, it pays to look at who else is in the cross-fire. The market has a habit of driving small companies below their fair value as high-profile problems emerge in their nearest listed competitor. Consider listed law firms Slater & Gordon and Shine…

Nickel a speculative contrarian idea in an otherwise bleak mining landscape

Relying on investment maxims is a dangerous strategy, but a few enduring truths in the resource sector provide useful clues. The first is that resource boom-and-busts are typically stronger and longer than the market expects. Investors continually underestimate commodity-price strength during the boom and miscalculate how far metals can fall during the bust. The slightest…

Mid-cap stocks with exposure to global equity markets

It is easy to like the long-term prospects for high-quality wealth managers. An ageing population and mandated superannuation contributions are huge industry tailwinds, and the best companies, thanks to their annuity income, can provide exceptional earnings growth. This column’s positive view on Platinum Asset Management, Magellan Financial Group and, more recently, UK-based manager Henderson Group…