Coffee Microcaps April 2025 Newsletter

Trump Traiffs

Hi Everyone

I imagine everyone will have a Liberation Day hangover after USA President Donald Trump implemented the latest round of global trade tariffs on imports to the USA. How long they remain in place and what effect these tariffs will have is anyone’s guess, but they are indeed the opening salvo for reshaping international trade in favour of the USA's interest. Whether the policy is successful or even ends up as a net overall benefit to the USA remains questionable, given that the other side of the trade partnership needs to move next. What is certain is that, like all other historical bouts of uncertainty, it is a net negative for stocks across the board.

Looking back on the month just gone, the microcap end of the market managed to outpace the bigger end despite the bigger end getting help from the traditional dividend-heavy month post half-year results, as can be seen in the table when we compare total return to straight price index return. However, with both indexes negative for the month, investors have very little solace at either end of the market.

Upcoming Coffee Microcaps Zoom Webinar Events

For anyone who doesn’t know, I regularly host presentations from ASX Microcap companies via Zoom Webinars. Two or four companies usually present on Thursday mornings from 9 a.m. to 11 a.m. AEDT Sydney time.

I thank Raas Research for sponsoring all the Coffee Microcaps Virtual events.

The ASX Microcap companies that present generally have the following four criteria.

•Under AUD 300m in market capitalisation

•In revenue and approaching cashflow breakeven or already profitable

•Outside the resources and biotech sectors

•"Industrial Microcaps” Include microcap technology, financial services, consumer goods, industrial products or services business, healthcare stocks, etc.

I have created a separate email list for invites to these Zoom events so that I am not spamming all my subscribers. If you want to be added to the events list, please email me at mark@coffeemicrocaps.com, and I will add you. I would love for you to join us for these free events.

Coffee Microcaps Webinars

All the Zoom events are recorded and uploaded to the Coffee Microcaps YouTube Channel. In addition to the ASX microcap company presentations, I interview leading ASX microcap fund managers about some of their top picks. Occasionally, we also have presentations or interviews with international microcap investors.

So, if you can’t join the Zoom webinars due to work, kids, life, or whatever, subscribe to the Coffee Microcaps YouTube channel and hit the bell to receive notifications when new content is added.

Also, the description section of each video on YouTube has relevant chapters, so you can jump to the start of a specific company presentation if that’s what you are after in a particular video.

Be sure to check out the channel, subscribe, and hit the bell to receive notifications of new content.

We have had a few events recently, so if you missed any, you can catch up on the content via our YouTube Channel.

Coffee Microcaps Morning Meeting 3rd April 2025

Sam Budiselik, MD & CEO of Cash Converters International Ltd (ASX: CCV)

Sam was back once again to give us an update on the business. While the traditional retail business remains, it has evolved from a franchise to more of a corporate-owned model over the last few years. On the lending side of the business, the line of credit product continues to replace the historically small loans business, and they are winding down the vehicle loan business. Despite the structural changes happening under the hood, the business has posted top and bottom-line growth in recent years. The business is well capitalised to pursue its new growth strategy and has been paying a 2c fully franked dividend for several years. If you haven’t looked at Cashies in a while, I recommend watching the webinar recording on our YouTube channel to get back up to speed on a business that might have moved on a fair bit since investors last looked at it.

Content Recommendation

As part of this newsletter, I also want to highlight some good content worth sharing with my subscribers.

Over the last few weeks, I have been working through the annual Semper Augustus client letter from Chris Bloomstran, which runs to a meaty 168 pages, so it is really a small book. Chris’s letter, though, provides some great insights into market returns and another aspect of investing. He also profiles one or two of his portfolio companies, but he is probably best known for his breakdowns of Berkshire Hathaway. Berkshire is a core holding for Chris’s portfolio. For any investor with a passing interest in the Berkshire business or those making the trip over to the meeting in Omaha in a few weeks, the Berkshire section is well worth a read before heading to the big event.

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