Our open forum events often kick off with an introduction, where I talk about some things that are on my mind. February’s introduction was inspired by a conversation I had with a colleague.
Our decision to add a medical device stock to the Run to One Dollar Model Portfolio a couple weeks ago was met with some skepticism from a colleague who questioned our rationale, particularly regarding dilution and profitability metrics. We had just spoken with the management of the company and are fairly impressed with the direction that the company is heading, while acknowledging that there still may be some bumps along the way.

We are adding a niche medical device company to our Run to One (R21) Model Portfolio. It is an under-the-radar growth story where management believes the company’s specialized products, rapid manufacturing capabilities, and disciplined financial execution give it a competitive edge in a traditionally slow-moving industry.

One of my goals at GeoInvesting, as well as at my new Substack, is to continue to highlight some of the best investors in the microcap space to help all of us generate alpha. Hand-picking these investors isn’t easy, but I think it’s what you expect us to do for you.

A recent development has positioned a little-known company for what could be a significant transformation. 

With a new customer that has the potential to double the size of the business and improve margins, the company is entering a new market with broad growth opportunities. 

However, we found commentary about additional new customer relationships that should be announced soon. This commentary was not that easy to find and is not in the company’s press releases.

Fresh off our Live Open Forum reviewing December 2024, we are welcoming 2025 with continued optimism that microcaps will continue to perform well, especially in certain industries.  While we didn’t do a full year review as part of the forum, a few days earlier I was able able to sit down with Bobby Kraft of the Plant Microcap Podcast for a focused MicroCap Year-End Review in which we dissected key developments in the microcap space over the past year.

We’re currently vetting a company in the defense industry that we believe may be uniquely positioned to benefit from the drone emergence by beginning to market existing technologies into the industry. 

While it’s still too early for us to determine if this company will target the drone market, we know the company well, because it’s already part of our Coverage Universe. Our preliminary research indicates that their products could clearly be a good fit within the commercial/military drone industry ecosystem.

The Russell 2000 has come full circle, retracing all of its 9.1% gains achieved during the post-2024 election “Trump rally”. Initially, investors rushed to buy on optimism, only to reverse course, partly as uncertainty over the direction of Trump’s policies grew. For example, what will views be on tariffs and Biden’s $1 trillion infrastructure bill?

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. The December performance of other key indexes are mixed: