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During a significant rally in small-cap stocks in November, The Russell 2000 and iShares Microcap ETF rose 11.07% and 11.66%, respectively. In November, the MS Microcaps Quality Index (MSMqi) achieved an increase of 18.9%, across 102 stocks.
For those unfamiliar, the MSMqi is the first-ever Quality Index that tracks high-quality GARPish (Growth at a Reasonable Price) and high-probability turnaround microcap stocks that are meeting multi-bagger criteria.
So far, December has seen a bit of volatility across several microcap stocks that we actively follow. For example, the MSMqi has declined by approximately 6.25% from record highs reached in November.
And I’m okay with that.
Our team generally welcomes periods of pause in momentum and related pullbacks in stocks we follow. This provides opportunities to revisit and analyze stocks that we still need to look at or maybe add to current positions.
So far in December, the performance of other key indexes are mixed:
- Russell 2000: -3.64%
- iShares Microcap ETF: -3.10%
- NASDAQ: 3.77%
- S&P 500: 0.08%
Post Earnings Skull Session Events
One of our favorite things to do, as companies report earnings, is to quickly bring management of companies that had a strong quarter as guests on our Skull Sessions Podcast.
This practice allows us to quickly assess why a particular quarter was strong and determine if our confidence in the company should be strengthened.
An example of this approach was our recent engagement with Intouch Insight Ltd. (OTC:INXSF), shortly after the company posted strong top-line and bottom-line results. This marked the company’s third interview with us. The CEO shared insights that reinforced our belief that the stock is poised to outperform over the coming quarters, as the company’s profitability continues to improve and the market recognizes that an annual run-rate P/E ratio of approximately 8x —and an enterprise-to-sales ratio of around 0.5x— is too low of a valuation for a high-quality leader in its industry.
Intouch Insight Ltd. develops managed mobile software applications and software-as-a-service platforms, and delivers services for private businesses, governments, and regulators in Canada and the United States
You can access all our interviews with INXSF at the following links:
- 12/21/2022 Management Morning Briefing with Cameron Watt, CEO Intouch Insight Ltd. (INXSF) – 12/21/2022
- 11/22/2023 Skull Session Management Briefing with Cameron Watt of Intouch Insight Inc. (INXSF) – 11/22/2023
- 11/25/2024 Management Briefing with Cameron Watt of Intouch Insight Inc. (INXSF) – 11/25/2024
Speaking of post earnings Skull Session recap events, we’re excited about tomorrow’s event, where we’ll host the CEO of Biorem, Inc. (OOTC:BIRMF) (BRM.V) at 12 PM Eastern Time.
Biorem is an environmental biotechnology company that designs, manufactures and distributes a comprehensive line of air emissions control systems used to eliminate odors, volatile organic compounds, and hazardous air pollutants
This will be our third engagement with Biorem, following a fireside chat and management briefing with the company’s leadership earlier this year.
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