- FIND UNDERVALUED STOCKS WITH
STRONG BALANCE SHEETS.
- PROFIT FROM MARKET
INEFFICIENCIES UNIQUE TO THE
SMALL CAP SECTOR.
- USE BOTH FUNDAMENTAL AND
strategy brings you financially strong
undervalued small cap stocks.
By finding stocks that have lower
than average price-to-book and
price-to-sales ratios we lower our
overall risk. We don't just look
for any undervalued stocks. Some
stocks are always
undervalued. We look for
stocks that are likely to be only
temporarily undervalued based on
the fundamental aspects as well as
on a stock's previous trading
We only select stocks that have
strong balance sheets. Our typical
recommendation trades between 1
and 2 times tangible book value. Tangible
book value acts like a floor for
a stock, especially when it
comes to technology stocks
because most of the tangible book
value tends to be comprised of
current assets (primarily cash).
A cash rich company has many
options open to it. A
company can spend money to improve
products, acquire and/or develop
new products, or buy back
shares as a way of increasing
shareholder value. When you
stick to only financially strong
companies you lower your risk and
increase your chance of really
outperforming the market.
mastering the relationship between
risk and reward is the key to
successful investing. There
must be a very favorable
combination of low risk and high
profit potential. Most
people fail at this because they
consistently underestimate the
risk and overestimate the
potential of the stocks they buy.
releases and quarterly reports are
conference calls are listened to.
We strive to find stocks where the
fundamental outlook is about to
addition the technical aspects are
looked at for potential bottoming
or breakout chart patterns.
We don't recommend a
stock just because there was a
technical breakout or other
technical pattern that we liked.
The stock must also be
undervalued and have the
fundamentals to support higher