A few weeks ago, I revisited the infrastructure screen we began to develop back in 2016, a project I hadn’t examined closely for quite some time. Upon looking at that update that showed up-to-date average returns of 247.91% for the stocks included in the screen, I felt it was time to re-evaluate the past inclusions.
Investors have not found one of our Top 5 Fave Model Portfolio holdings that should benefit from the AI “hype” that is not actually hype. We have followed it for 7 years, but today, the company is led by a new CEO that used to work for its biggest customer.
This little known data center company generates around $20 million in revenue, is profitable and has a major customer at the front lines of building out AI data center infrastructure with its partner, NVIDIA Corporation (NVDA).
It’s been an interesting 15 years for GeoInvesting. Those who have grown with us probably know our history pretty intimately. They know that we began as a research firm offering free bullish biased research on quality microcaps and high probability turnarounds. They know that for a period of time our research included intense investigatory due diligence, rooting out fraud in the universe of China-Based companies listed on U.S. exchanges, as well as on U.S. Pump and Dump schemes.
We’re about to add a new stock to our infrastructure screen. The screen has a history of delivering consistent multibagger returns.
Between 2012 and 2017, the GeoInvesting research team began building an infrastructure screen to track stocks that will benefit from certain industries upgrading their infrastructure, as well as the United States government’s goal to spend massive amounts of money by handing out contracts to U.S. companies
There may not be a cookie cutter approach to finding multibaggers. For example, this term defines stocks that rise 2x or more. While nabbing a stock that doubles is nice, we invest in microcaps because they present lots of opportunities to find stocks that can rise 5x to 10x over time.
Still, with about 10,000 microcap stocks trading in North America, there are some traits or factors that continue to pop up in past multibaggers that you can reference during your research process to find the next one.
For example, companies that don’t issue an excessive amount of outstanding shares over time protects investors’ ownership interest in the company by limiting dilution.
It’s not often that you see a stock growing its sales and earnings, selling at a P/E of 3x, right under its book value per share, where cash makes up the majority of its book value. I’m looking at one right now that could more than triple to trade at a P/E of around 10x and still be cheap. More on this in a second. I’m not a big fan of labeling stocks as growth or value stocks. Even Warren Buffett mocks such classifications, saying:,
I’m excited about a stock in our pipeline that we have been following since 2020. This stock is listed in our Run2One Model Portfolio, a selection of stocks trading below $1.00 that we anticipate will surge beyond the $1.00 mark due to their current undervaluation and the potential for substantial revenue and net income growth. The company helps its clients understand their customers’ habits via data collection services and on-site inspections by field agents.
As you may know, on November 16 2023 at 2pm, we hosted a webinar about our contrarian or Buy On Pullback strategy to take advantage of volatility in stock prices, seeking to buy stocks that fall sharply due to reasons unrelated to the fundamentals of the underlying company’s business.