We believe in evidence-based value investing. Our focus is on microcap companies.
Our mission is to bridge the information gap in smaller companies, empowering investors to exploit market inefficiencies and seek out microcap value opportunities to achieve market-beating returns.
Our Approach:
- Evidence-Based Framework: Our model is grounded in decades of academic research and market data that support the effectiveness of value investing, particularly in the microcap space. Studies have shown that microcap stocks have outperformed large cap stocks by more than 1% on an annualized basis since 1973, highlighting the potential for higher returns in this asset class.
- Exploiting Market Inefficiencies: Microcap companies tend to be the least efficient area of the U.S. equity market due to lower institutional ownership and reduced analyst coverage. This creates opportunities to identify quality, growing microcap companies before they are fully recognized and valued by the market.
- Comprehensive Analysis: We combine quantitative tools with fundamental analysis to evaluate microcap companies. This dual approach allows us to leverage the breadth of the microcap universe while also conducting in-depth assessments of individual companies’ business models, risks, and growth potential.
- Focus on Quality and Growth: Our scoring system emphasizes companies with strong fundamentals, sustainable business models, and potential for long-term growth. We look for microcap firms that have the ability and resources to become bigger, better companies over time.
- Risk Management: Given the higher risk profile of microcap investing, our model incorporates robust risk management techniques to help investors navigate this volatile space more effectively.
- Transparency and Education: We aim to educate investors about the unique characteristics of microcap investing, including its potential benefits in portfolio diversification and as a liquid alternative to private equity investments.
- Adaptive Model: While our approach is based on established evidence, we recognize that markets evolve. We commit to continuously reviewing and updating our model based on new compelling information and changing market dynamics.
- Long-Term Perspective: We encourage investors to view microcap value investing as a long-term strategy, capable of delivering superior returns over full market cycles.
By providing thorough, unbiased analysis of microcap companies, we aim to help investors uncover hidden gems in this often-overlooked segment of the market.
Our goal is to empower investors with the tools and insights needed to make informed decisions and potentially achieve above-market returns through disciplined microcap value investing.