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This week’s Microcap Information Arbitrage Weekly Wrap-Up is ready — spotlighting key moves, missed signals, and overlooked opportunities in our 1,500+ coverage universe built since 2009.
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Second quarter earnings season is essentially over, but this week was one of our busier weeks of video content with Investor Insights Skull Sessions highlighting Edwin Dorsey of The Bear Cave & Sunday’s Idea Brunch Substacks and Hugo Navarro from the Small Cap Treasures Substack. I have to say that these were amazing chats. Edwin and I talked about China Fraud and the new stuff he’s doing to help protect investors. Hugo is absolutely on fire with some of his recent stock picks.
On the research front, we published a deep dive on a company that develops advanced materials and emission catalysts (sign in or join today to reveal company), and the bullish information arbitrage around decarbonization and data centers trends it’s about to benefit from. We simultaneously added the stock to our Select Coverage Universe Model Portfolio. You can read the full story here.
We also participated in a live Q2 2025 wrap-up, where we each discussed five stocks that we are most interested in following from the second quarter earnings season. This was our fourth earnings wrap-up event that I did with Sebastian. You can see the others at Sebastian Krog’s Substack, Treasure Hunting : Q3 2024, Q4 2024, and Q1 2025.
We also hosted a Fireside Chat Skull Sessions with Kingstone Companies, Inc (NASDAQ:KINS), a property and casualty insurance company, moderated by Scot Weis of Semco Capital, where management laid out growth and profitability targets, as well as the growth plan in and outside New York. The event was held on the Geoinvesting platform. We had a near record investor participation turnout of over 50, second to our 80+ member turnout post-earnings review with Tecogen Inc. (NYSE:TGEN) on August 15, 2025.
Looking ahead, we are excited to announce the September Open Forum scheduled for this Thursday, September 4th. In this event, we will recap the earnings we covered the previous month, including key stats from our coverage universe, such as the biggest movers and new highs. It’s a great chance for investors to catch up on our latest insights and engage in discussions about the latest market trends. We hope you’ll join us!
On the earnings front this week, Biorem, Inc. (OOTC:BIRMF) (TSXV:BRM), a company that designs and manufactures air emission control systems, posted a sharp rebound quarter. Management emphasized that earlier logistical headaches, mainly tied to international shipping, have been resolved.
The company’s delivery cadence seems back on track, especially for clients in China, the Middle East, and Southeast Asia. Bidding activity remained strong, as did continued traction from offering integrated service solutions alongside its air pollution control systems. Unfortunately, investors in Biorem will have to contend with lumpy quarterly results due to the project-based revenue model that can create unpredictability, where timing of contract awards and deliveries can cause sharp swings in results.
Our Quick Take (excerpt from our morning email during the week):
It’s good to see the company bounce back from a temporary period of quarterly financial lumpiness, something that’s going to be inherent in the business, at times. We still think the long-term setup is great for this company with strong industry tailwinds (clean environment solutions). Hopefully overtime, quarterly financial lumpiness will smooth out as the company continues to focus on ancillary recurring revenue type service offerings. If you’re interested in this company, you should definitely watch the interview with the CEO who attended the March 2025 microcap virtual conference hosted at the Microcap Investing Cliff notes Substack.
You can also watch Derek discuss the company’s Middle East plans here.
Now, let’s shift focus to the insights from the past week’s discussions.
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Q2 Earnings Discussion: Analyzing Top Picks and Emerging Opportunities with Sebastian Krog
Last Monday, I participated in a long-form earnings chat with Sebastian Krog (@SebKrog) to review 2025 second-quarter highlights from under-the-radar names.
One of the five stocks I liked was Phonex Holdings, Inc. (OOTC:PXHI), a platform for buying and selling used smartphones, is a long-time favorite, partly due to its disciplined capital allocation.
But now, PXHI’s has become more exciting, as it is transitioning from a capital-intensive iPhone resale business into a scalable platform licensing model, which was fully put in motion by a $50 million legacy asset sale. The company posted 182% year-over-year software revenue growth, with ~80% gross margins. With ~$50 million in cash, equivalent to near $1.50 cash per share, and no debt, I called the current setup “a free call option on a potentially scalable SaaS business.”
Sebastian raised a valid concern about how little public information is available on the company. PXHI doesn’t report through traditional press releases and keeps a low profile, but the strategy to reinvest in vertical SaaS and expand into warehouse management software adds new market optionality.
Sebastian touched on Cipher Pharmaceuticals, Inc. (OTC:CPHRF) (TSX:CPH), a specialty pharmaceutical company, another name built on founder re-involvement and smart capital deployment. Management highlighted that the Natroba acquisition, initially met with skepticism, has now begun contributing meaningful EBITDA and could form a launchpad for future U.S. market expansion. It’s also a name we like, residing in our Focus Model Portfolio.
Other names discussed in the chat included Koil Energy Solutions, Inc. (OTCQB:KLNG), Flexible Solutions International (NYSE:FSI), Acorn Energy, Inc. (NASDAQ:ACFN), and Leatt Corp. (OTCQB:LEAT). If you missed the session, I recommend checking out the full replay, especially if you are looking for insights into lesser-known companies.
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| The Weekly Wrap-Up is meant for those in a hurry, along with those who want to spend a weekend hunting for ideas or quickly catch up what we talked about during the week. Our Weekly Wrap-Up brings together everything we discussed during the week in our morning emails and premium alerts, as well as new information and high conviction ideas that we did not communicate that you should know about. From earnings coverage, new research coverage on stocks, picks and research from our subscribers to event highlights from our monthly open forum that takes place to the beginning of each month and interviews with management teams and investors. 📬 Missed any emails this week? You can catch up on all of them in one place — just check out the full archive here. |
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Kingstone Gets the Semco Spotlight
Semco Capital’s Scott Weis (@SCMRE111) hosted a deep dive fireside chat with Kingstone Companies, Inc (NASDAQ:KINS), a property and casualty insurance company, joined by CEO Meryl Golden, newly appointed CFO Randy Patton, and Chief Actuary Sarah Chen.
The call came just after Kingstone posted its most profitable quarter in company history, with $11.3 million in net income and an above-average industry combined ratio of 71.5%. (The combined ratio measures underwriting profitability; a lower number is better, and anything under 100% indicates an underwriting profit.) Despite that, the stock has fallen from a high of $22 to the mid-teens. Golden addressed the disconnect, emphasizing the consistency in results (seven straight profitable quarters), a clean balance sheet, and meaningful expansion plans.
Management shared more about the Select product, which now accounts for half the book and is showing 30% lower claim frequency than their legacy offering. They expect Select to comprise 60–65% of policies in force by next year. Actuarial lead Sarah Chen explained how machine-learning-driven underwriting and risk segmentation are helping Kingstone widen margins and boost predictability in loss ratios.
Golden also walked through recent competitors exiting from the New York market, specifically subsidiaries of Allstate and Berkshire Hathaway, which essentially handed KINS a lucrative opportunity. The 2025 growth outlook includes ~$10–12 million in new premium from just one of those relationships, and possibly up to $30M over three years.
For investors worried about expansion risk, especially given Kingstone’s past missteps in other states, Golden emphasized the difference this time: a better product, tighter cost control, more conservative underwriting, and the strategic use of ENS (excess & surplus lines) to remain flexible and adaptive in catastrophe-prone areas.
The call wrapped with a clear message: management is prioritizing long-term profitability and organic growth over promotion. A 2026 EPS guide will come in Q3, and the investor day is slated for late Q4 or early next year.
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Investor Insights Skull Session with Hugo Navarro
Our third Video event last week came from a skull session with Hugo Navarro, author of the Small Cap Treasures Substack. His model portfolio is up 70% YTD, and his focus on unloved geographies, valuation dislocations, and early turnarounds came through clearly in his pitches.
Hugo looks for companies that can double in three years under conservative assumptions, favoring simple businesses with identifiable catalysts and niche moats. Several of the names he discussed have already delivered huge returns, but a few, including two from the UK’s AIM market, may just be getting started.
Here’s a rundown of the names covered.
- Alpha Group International plc (LSE:ALPH), a financial services company, was acquired earlier this year at a rich multiple after compounding quietly under the radar. Hugo originally flagged it when it was trading at 10x earnings, despite a cash-rich balance sheet and strong net interest tailwinds.
- Libertas 7, S.A. (BME:LIB), a Spanish real estate developer and asset manager, was another big winner. Shares re-rated from €1.75 to near €5 after the company converted a large development pipeline into real P&L and guided for strong long-term earnings. Hugo has trimmed 80% of the position but continues to track its NAV discount and equity portfolio for follow-up opportunities.
- Intellego Technologies AB (STO:INT), a company that develops and sells photochromic ultraviolet indicators, remains his highest-conviction position. The company makes UV dosimeters that detect disinfection thresholds in hospitals and labs. After changing its business model, Intellego began selling the hardware at breakeven while monetizing high-margin consumables. Revenue is scaling quickly on the back of large Chinese and European distribution contracts. Hugo still sees potential for another 2x, even after a 600% gain, calling the setup “under-promising, over-delivering with room for rerating”.
The more under-the-radar plays still active in his portfolio include:
- Carecloud, Inc. (NASDAQ:CCLD) (USA), a medical billing SaaS that popped after he highlighted its preferred-share dynamic
- Sylvania Platinum (AIM:SLP), part of a successful palladium-based commodity theme
- Embark Education (ASX:EVO) and Nido Education (ASX:NDO), two Australian childcare rollups. Nido stood out for its “incubation” model, managing centers before acquiring them at preset EBITDA multiples, allowing for risk-adjusted, capital-light scaling.
Two UK-based microcaps rounded out the discussion, and both deserve extra attention:
- Ondo InsurTech Plc (LSE:ONDO), provider of leak detection and water damage prevention technology, is building a recurring revenue stream around its LeakBot IoT device, which detects household water leaks before they result in costly claims. The device is provided by insurance companies directly to policyholders and includes both monitoring and plumbing services, all for about $60 annually. Hugo noted that the economics work well after year one, with gross margins reaching 60–80% as plumbing visits taper off. He believes a long runway remains in the U.S. and Nordic markets, where penetration is still in early innings.
- Manolete Partners Plc (AIM:MANO), a litigation finance firm, may be entering a pivotal turnaround window. The company specializes in acquiring insolvency-related claims outright, not just financing them, giving it tighter control over costs and legal outcomes. While average case revenue was suppressed post-COVID due to delayed bankruptcies, Hugo believes those dynamics are reversing, and the company could return to historical levels of profitability. A recent CEO departure and insider stake purchase could also hint at strategic activity or M&A optionality. With an anti-cyclical tailwind and a modest £40M market cap, Hugo sees it as a classic “value trap ready to break out”.
For investors who aren’t limited to U.S. markets, Hugo’s research is worth a follow. We’ll be inviting him to future investor pitch panels and CEO firesides.
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Edwin Dorsey’s Red Flag Radar
We closed the week with Edwin Dorsey (@stockjabber), founder of The Bear Cave and Sunday’s Idea Brunch Substacks, whose work continues to highlight red flags hiding in plain sight. Recall that Edwin Dorsey interviewed me for his idea Brunch Substack in June. If you haven’t done so yet, I highly encourage you to read it here.
While Edwin doesn’t take short positions himself, his newsletter and growing toolkit of public research tools are used by many institutional and retail investors to understand where risk is hiding.
In our conversation, Edwin shared how he uncovers shorts using unconventional sources: SEC FOIA logs, audit partner records, comment sections on Seeking Alpha, and unscripted interviews buried on YouTube. He also spotlighted Signet Jewelers Limited (NYSE:SIG), a retailer of diamond jewelry, which he believes is on the wrong side of the lab-grown diamond revolution. He sees this trend as a slow-burn disruptor that’s eroding natural diamond demand and compressing prices at a pace Signet likely can’t offset.
He also gave me a demo on three public tools now available:
- StopNasdaqChinaFraud.com: tracking WhatsApp pump-and-dump chatter
- StockPromotionTracker.com: surfaces pay-for-promo campaigns across small caps
- FOIAsearch.com: flags signs of regulatory risk
If you haven’t tried those yet, they’re well worth exploring. Edwin also walked through his microcap bullish thesis on Rave Restaurant Group, Inc. (NASDAQ:RAVE), a franchisor of pizza chains, which is showing early traction under a turnaround led by a former Domino’s exec. With a clean balance sheet and improving same-store sales, he sees the potential for a meaningful re-rating if execution stays on track.
All in all, it’s been a busy week with some great conversations and fresh ideas. If you missed any of the sessions or research, definitely check them out. There is a lot of good stuff worth digging into. That’s a wrap for now.
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| If you enjoy performing press release research or think you will see value in a tool that expedites your press release research process, you should check out a press release tool my team is building by going here. |
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