This is the first edition of the Small Cap Idea Book.
My top 20 ideas in one 150 page pdf you can download below.
Each idea has its own 7 page writeup, is categorized, and easily comparable.
Four categories of ideas:
Compounders with strong moats and growth runways
Serial acquirers with great capital allocators
Cyclical stocks close to rebounding
Self-help stories with structural improvement
I have spent months going over 300 US small caps with a market cap of $100mm-$2bn to find the ‘hidden gems’. The median market cap of the ideas is $602mm.
I believe 6 stocks have 100-200% upside over three years, 10 have 50-100%, and 4 are worth monitoring anyway because they are great businesses or have a great owner-operator.
Here is the first page of the Idea Book, which ranks all 20 stocks by upside:
Join the 300+ subscribers who have upgraded to paid to download the Idea Book (this page will reload when you are paid to include the download link).
Subscription prices will be going up later this year because I believe the Idea Book (and future editions) makes the current price far too cheap. But anyone who subscribes now locks in today’s rate forever.
The Idea Book also includes tables on:
Highest Quality Small Caps: Great businesses are rare among the small caps as they have usually compounded to become mid or large caps. The Idea Book includes high-quality compounders that are cheap right now, but also ones that are not cheap but worth keeping an eye on. All have strong ROICs, moats and management teams. All have their own writeup.
Great Owner-Operators: Very few small caps start off with strong moats. In my experience the difference in quality between the best and worst management teams can be very large in small caps and the best CEOs when aligned with shareholders can build moats and deliver exceptional returns.
Covid Boom-Bust Recoveries: Many cyclical businesses benefited from a Covid boom (e.g. housing, boats, bikes) and then a bust. Some of these are at a cyclical bottom now and appear to be bottoming or inflecting. The companies in the list qualify and have net cash or manageable debt levels.
All 20 stocks have their own 7 page writeup:
The Idea Book is 20 writeups in one go, and took me months of work. I believe it will save you a huge amount of time, generate several ideas, and is the most valuable article I have written.
Paid subscribers get:
20 writeups
Tables ranking all writeups by upside and theme
Writeups categorized by compounder, serial acquirer, self-help, cyclical
Join the 300+ subscribers who have upgraded to paid to download the Idea Book (this page will reload when you are paid to include the download link):
This article is for informational purposes only and is not investment advice. Read important disclosures here.