If you love using proven methods to find stock investments, we focus on one of them in healthy doses. It’s called information arbitrage, or as we like to call it, InfoArb. Once again, it’s enabled us to find one of the better stock investment ideas we’ve come across in a while. But first, let’s review what InfoArb is.
It can’t be said much better than the following, a quote from GeoInvesting’s co-founder Maj Soueidan:
“Microcaps appeal to me due to the information arbitrage opportunities they provide. An information arbitrage (InfoArb) exists when a disconnect between stock prices and available public information on a company is noticeable, and monetarily worth pursuing. Sometimes, the mispricing of micro-caps can be substantial. This strategy has “paid dividends” for many investors. Part of the reason the “InfoArb” opportunity exists is because investors often associate microcap stocks with pump & dump companies with no revenues and profits. But there is no better strategy in the stock market than to look for opportunities where others are not looking. There are many good Tier One quality microcap companies with real revenues, some even with blue chip customers.”
To gain a further understanding of why investors ignore microcap stocks, and why it might be a good time to start exploring them, please read our brief takes on this:
- The Case for Microcaps: A Niche Worth Exploring
- Microcap Stocks – There’s A Lot To Like About Them | GeoInvesting
- Micro-cap Investing – Is Smaller Better? The Pros and Cons
As a matter of fact, here are a few InfoArb microcap stock ideas we’ve covered in the past, their performance, and the time it took for their first peak performance to be achieved.
You’ll notice that Information Analysis Inc (NASDAQ:IAIC) is part of this group and is the epitome of how InfoArb can produce outsized returns. Please see more on IAIC here to get a flavor of how we approach situations like this. The link will take you to a video stock pitch we prepared.
So anyways, the new stock idea we are focusing on was originally brought to us by a financial planner in our network. (By the way, we love it when that happens since crowdsourced ideas sometimes bring us some of the most rewarding investments, and it’s a win for everyone).
We believe that once investors find the hidden information we have found, the stock has the potential for a multi-bagger move, very soon.
Again, it’s rare that we come across an InfoArb idea so good that we are actually kind of protective of it in a way…so much so that we will limit the number of new premium memberships that get access to the idea. Simply email us here or at email@example.com if you are interested in being a part of that limited crowd.
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