Small-cap value investing requires a different approach to large-cap value. Smaller companies generally don’t have the long history of success and dividend payments that are an integral part of the UK Value Investor newsletter’s approach. Instead, the company’s assets can be used for valuation instead of earnings. Ben Graham developed the original version of this approach in the 1930s while the strategy used here is a modernised version.
You can see the original small-cap strategy article here.
Just about everybody who has ever owned a car must know what a Haynes Manual is. For many they bring back memories of a misspent youth trying to squeeze another horsepower or two from an aging Vauxhall Chevette or Mini 1000. With the advent of ever more complex cars which are tuned and serviced...
Read more...
It’s time I got back to the task of building up my portfolio of small-cap, low debt, deep value investments. This week the target is Promethean World, a company which makes interactive and collaborative technologies for education and business; think of white boards that you can write on and then move around what you’ve...
Read more...
There are lots of different ways to be a value investor. When I’m investing in large companies I look for stability and strength above all, followed by the potential for growth and a low price, of course; but with small-caps I’m looking for something else entirely. The very fact that these businesses are small...
Read more...
Just last week I wrote about how investing in large and successful businesses is generally a happier affair than messing with sickly small-caps, and to prove the point I offer Exhibit A: Northamber. If you’ve been around the value investing blogs over the last few years you’ve probably already heard of Northamber. I owned...
Read more...
This small-cap media company can be yours today for only 39p a share. It has a long history of (adjusted) profitability and dividend payments and the yield is currently about 5%. That may not sound like much but the dividend is currently in ‘recession mode’ at 2p per share, down from over 4p in...
Read more...
Flybe is the next candidate for my small-cap value fund which is based on a variation of the net-net investment strategy. Overview Flybe is Europe’s largest regional airline. In 2002 it had a name change from British European to Flybe and moved to a super-low cost business model which it had to do to...
Read more...
I’m still very much in the process of filling up the 21st century net-net portfolio with mostly small companies trading at a discount to book value and sometimes tangible book value. Because these companies are often not what I’d call ‘global superstars’ there is probably more risk involved in owning these things. That’s why I also...
Read more...
Digging around at the small-cap end of the market can be a dangerous activity, especially if you’re investing like a loose cannon by buying without a plan or strategy. Despite these dangers, value investors do love their small-caps and so it’s worth spending some time drawing up a repeatable and systematic plan for uncovering...
Read more...
If you run a net-net screen of some kind it’s likely that you’ll have come across this (very) small cap stock. Titon Holdings is a Ben Graham net-net in almost every way. It’s a manufacturer, it has property, plant, fittings and fixtures and equipment to bolster his beloved tangible asset value. It also has...
Read more...
AGA Rangemaster, owner of a truly iconic kitchen brand, could well turn out to be an incredible bargain. In fact, investors can buy the company today for little more than the cash it holds in the bank. It may be that – for the moment at least – a price of around 75p is...
Read more...
