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.
It is particularly important for investors that don’t have enough time to perform the deep dive analysis necessary to run a concentrated strategy to expose themselves to a diversified portfolio of high-quality microcap stocks that can offer the alpha-rich returns other classes of market capitalization cannot always promise.
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:
As we continue to adjust to the evolving market landscape and subscriber feedback, we believe it is prudent to focus on more impactful investment strategies through a main high-conviction portfolio that we’ve been building on a monthly basis through our Live Monthly Forum Events.
The core approach and philosophy that guided the Top 5 Faves Portfolio selections will remain intact, but with a greater emphasis on quality.