Inquisitive ● Independent ● Sophisticated
SmallCapInvestor was created to help investors navigate the complexities of the small-cap investment world by giving them the means to make smarter, more-informed investment decisions and highlighting some of the most prospective, investment opportunities on the street. I have a track record of consistent success and always strive for excellence in my due diligence process.
In the investment world, information is of the utmost importance. With every piece of information gained, you put yourself at an advantage over any potential investor who do not know that information. For this reason, the first step in my stock selection process always starts with a thorough analysis of the company in question. I will perform a deep dive in an attempt to gather every possible piece of information about the quality of the asset or business model, the share structure, and the people behind the deal. I will also reach out to my network to gather any possible intel about the deal which is not easily accessible to the general public. Whether it be phone calls, e-mails, or in-person meetings, I make it my mission to get to know who I am investing my money with and what they plan do with it.
I also truly believe that reputation is everything in this business; thus, ethics and transparency are always my number one priority.
The Due Diligence Process
The first step in my due diligence process starts with a thorough analysis of quality of the asset or business model in question. For example, when analyzing a natural resources company, I need to know everything about the asset such as the geology, resource size, grade, jurisdiction, permitting status, valuation, etc., There are so many different factors that ultimately go into determining the success or failure of a company and I make sure to know them all.
Possibly the aspect in which I apply the most weight to. It doesn’t matter if you have the best asset on the street, if you have a management team who is not capable of executing and delivering on their strategy, the company may never reach the ‘exit’ stage. We believe that management teams who have had success in the past, have a higher likelihood of repeating success in the future, than a management team who has not done it before.
The Capital Structure
There are many great stocks with a great story but differentiating between the great story without a proper share structure and the great story with a healthy share structure can be the difference between investment success and investment failure. This means being aware of any potentially dilutive securities as well knowing how the deal originated.