I am fairly active on Twitter, looking for great educational and investment strategies, as well as stock pitches that seem interesting. I recently came across the founder of an investment management firm specializing in microcap stocks. His fund was up 20.8% over the first half of 2023.

I also found one of his quarterly investor letters that laid out one of his favorite picks, one for which I posed the possibility of the stock rising at least 50%.

He has been an investor since his teen years, and has been running his fund for the last 7 years..

The cool thing about his stock pick is that it’s a stock I am very familiar with and was actually moving up the research funnel to potentially talk about at GeoInvesting. My team had written about the stock on GeoInvesting, right before it rose 145% from our publish price to its peak in 2022. It pulled back sharply during the tail end of the 2022 market mess and into the first part of 2023, but is coming back nicely, on the heels of some really nice earnings reports.  So, I invited him to be a guest on my Premium Podcast to discuss his research process and go over his stock pitch.

Elevator Pitch

The company in focus is a provider of staffing solutions to both commercial and government sectors in North America.

Some Key Points About His Bullish Pitch:

• Management has repurchased over 20% of company shares since 2020.
• As part of a multi-year turnaround, the company has strategically expanded its business into areas that are less susceptible to economic fluctuations such as clean energy and healthcare.
• Strong Fundamentals and Cash Flow: Benefiting from a robust order backlog, the company enjoys a steady cash flow, a significant portion of which is allocated towards share buybacks.
• Most importantly, the company is about to enter an extended period where they are expected to grow earnings.
• Assuming a modest P/E of 15x would lead to a 50% rise in the stock’s price.