We launched Buy on Pullback Portfolio #13 near the end of the day on Friday.

Recognizing that markets often overreact, we’ve carefully handpicked a basket of 8 microcap stocks that have gotten beaten up over the last few weeks, some declining to prices that we thought we would not see again. Four stocks are trading at P/Es of ~10x on run-rate EPS. We might be early and a little off on our timing, but we did not want to get greedy at prices that we see as being considerably reasonable.

Some people might  say that the data center industry itself is currently at a crossroads already and in a “hot or not” debate in the sphere of investing. In some corners, there are mixed signals causing investor uncertainty. On one hand, industry leaders like $DELL, $META and $NVDA assert that the market remains incredibly healthy, with NVDA CEO Jensen Huang forecasting that data center infrastructure spending could reach $2 trillion in the next four to five years. 

While many investors are panicking over last week’s market performance, we see this as an opportunity. These are exactly the types of market conditions that allow us to execute our Buy on Pullback strategy. Right now, market weakness is aligning perfectly with the earnings release schedule for micro-cap stocks.

Reading press releases is one of the most important (and often overlooked) aspects of microcap research. Yet, reviewing them across multiple financial news wires is often cumbersome and time-consuming. To address this challenge, my team and I are in the early innings of developing a specialized tool called PRaaP (Press Releases as a Platform). It centralizes press releases from various sources, provides core data such as share counts, basic fundamentals, and charts, and allows for advanced filtering based on price, market cap, outstanding shares and news category.

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.