Micros are starved of capital at the moment. So rule number one is screen out those needing to raise capital due to low cash levels.
Top-down is not good for alot of the minerals micros, especially bulks, nickel, rare earths etc. Only concentrating on copper/gold plays and only hold one 'greenfield' explorer. Rest are 'soon to be' producers or producers trading at silly valuations. Great time to buy them as long as funding is secured for the next 12 months.
In terms of my preferred micros, I am looking for a quick path to self-funding of future large scale mine developments. So always looking for high grade zones etc that can be brought on-line for limited capex and then the free cash used for lower-grade/higher volume open pits or underground.
You don't want to be stuck with a deposits like Rex that has massive, low grade tonnage but needs +$600m in capex to get the mine up. Crazy numbers in this environment.
Nice thread. I love the micros the most even though it has been a tough, tough market over the last few years.
Most liked posts in thread: Micro cap specs
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Re: Micro cap specs,BCT is a sure thing 20 bagger imo...TB
BCT is a micro cap i have been following for a few months now they are not a miner which is a plus as it wont take long for them to be cash positive.
BCT have a product with no competitors so they have the market to themselves so imo this is
a serious 10 bagger from 20c price or from its 25c listing price.
i have spoken with management regarding an investment & they know their product & market...
so its just a matter of time.
micro caps to about $250m has had my interest for all of 2012 as i believe they are an undervalued area of
investment many investors overlook.
the appeal for me is the opportunity to get in right from the start or close enough to get yourself a
10 or 20 bagger & be there while the company grows as it attracts the big hitters...TB
With the extreme movement of micro caps in the last couple of weeks, lead by SIR and then closely followed by MAT, SBR, AOC, PDZ, HOR and PEX just to name a few off the top of my head.
Would it be safe to say there is more interest in micro caps lately?
Has this pricked your interest to look at a few when you haven't been of late?
Do you expect things to continue along this path, or are they the result of a few really good announcements?
I know I have been flat out like a lizard drinking of late and have compiled a list of 15 stocks I see as having real promise. Near term and down the track a little.
So far I have run through over 800 quarterlies.
This is the best of what I have found so far and the increase/decrease since identification and addition to watchlist.
Criteria is based on MC:Cash position, micro cap, chart positioning (a downward trend toward cash backing is preferable), project potential.
PRE + 9% (Thanks to burglar, and once consolidation & cap raising is completed)
On a secondary watchlist I have these, which dont exactly fit all my criteria, but come pretty close.
LGM, PDZ, GPH, WAL, BNR, SNY, LIN, PUN, JAL, EPC, MSR, MGL, JRL, IRM, IKW, MRQ, MGV.
My hand selected Micro Specs performing admirably ATM.
PRE + 11% (Thanks to burglar, and once consolidation & cap raising is completed)
I have since added
Good work on the selections. That's got to be more than a lazy afternoons work...
My micro stocks system has been painfully lying dormant since April but kicked back into gear last week.
The XSO is up more than 10% in less than a month so the bottom end of the market is certainly showing some signs of life.
I'd be more than happy if things just trundled along like this for the rest of the year!
IMO this is where the project selection element of Low Caps is critical. The other criteria set the base for the announcement induced/speculative purchase SP rises.
Do you mind running through your system criteria and the stocks you are watching ATM?
PRE + 9% (Thanks to burglar)
To your point Synergy, yes a rising market probably means you can loosen the criteria a little, a falling market your criteria must be set in stone.
I was just wondering what your exit criteria is for this 'project'? With specs being notorious for the first ones to drop when the market turns to the downside, do you have any criteria to lock in potential profits?
First thing is that my 'system' is completely manual. The only filter I have is the criteria in my head. Labour intensive, yes, luckily I enjoy this kind of work.
Exit criteria. I honestly cant throw a blanket over the lot and say I will exit after X, Y, Z.
Each stock has its own strengths and weaknesses, including a little niche reason why I enter in the first place. It could be cash position v MC v Cash burn, an announcement I am anticipating arriving, a cap raising, major investment, dilution etc etc.
Exit reasons for each stock vary and timing varies.
With entry based on MC:Cash, constant review is important to see if you are getting value for spend.
I have got it very right and also very wrong in the past, but have learnt from both and have reduces my profit expectations and risk accordingly.
Sorry I cant define it in a more clear way
The pro/con of a manual system, I suppose.
Surely a say 50%+ gain would prompt taking some off the table?
This was a list I was compiling while going through every spec miner on the ASX. I am 3/4 of the way through. To be honest did not expect these results this quickly.
This was meant more as a test of my criteria, as specs had been performing abysmally lately. Wanted to see if where I was at was still relevant in this market.
I will have to run a review on the list again soon.
Hypothetically I would not sell any of those at this point, there is still alot of unrealised potential in each one
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