Coffee Microcaps June 2024 Newsletter
A good start is half the battle
Light at the end of the tunnel?
Hi Everyone
The S&P/ASX Emerging Companies Index TR finished up +5.29% for FY2024. This continues the good start we have seen from the microcap end of the market in 2024. On a calendar year-to-date basis, on June 30, microcaps were still ahead of small and large caps, but the gap narrowed after microcaps had a torrid June, finishing down 3.73% for the month. We are not out of this bear market yet, but at least a light at the end of the tunnel does seem to be in view.
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 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.
Events happening this week
Coffee Microcaps Moring Meeting Thursday, August 1st 2024
Sam Budiselik, MD & CEO of Cash Converters International Ltd (ASX: CCV) 9.00-9.30
Brendan Malone, MD & Group CEO of RAIZ Invest Ltd (ASX: RZI) 9.30-10.00
You can register for the webinar via this Zoom link.
Coffee Microcaps Appendix 4c Results Wrap Friday, August 2nd 2024
Trent Lund, CEO of Wrkr Ltd (ASX: WRK) 9.00-9.30
Martin Filz, CEO of Pureprofile Ltd (ASX: PPL) 9.30-10.00
Michael Ivanchenko, CEO of Kinatico Ltd (ASX: KYP) 10.00-10.30
Ian Olson, CEO & Co-Founder of Pointerra Ltd (ASX: 3DP) 10.30-11.00
You can register for the webinar via this Zoom link.
Coffee Microcaps YouTube Channel
All the Zoom events get recorded and uploaded to the Coffee Microcaps YouTube Channel. In addition to the ASX microcap company presentations, I interview leading ASX microcap fund managers on some of their top picks. Occasionally, we also have presentations or interviews with some 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.
Microcap Fund Manager Interview
As June is quiet on the reporting front, I took the opportunity to speak with Luke Winchester from Merewether Capital. Luke and I chatted through two microcap stocks currently in the portfolio, Ai-Media Technologies Ltd (ASX: AIM) and Aerometrex (ASX: AMX).
You can watch the interview recording with Luke and our discussion about the two companies via the Coffee Microcaps YouTube Channel link.
Content Recommendation
As part of this newsletter, I also want to highlight some good content worth sharing with my subscribers. Hopefully, the content will be something subscribers will also enjoy and get some value from.
I have previously put together a microcap fund manager performance review, and given that June 30 is the end of the financial year, I thought I would pull the numbers together again.
First, though, a few changes have happened since the last time I produced this table.
Novaport & Fidante have closed down their microcap strategy.
The Macquarie Emerging Companies Fund has morphed into a traditional small fund rather than a microcap fund, at least in my opinion. So, it has been removed from the universe.
The same can be said for the Glennon Small Companies LIC, which has been removed from the universe.
The Forager Australian Shares Fund has now transitioned from being an LIC to more of a small-cap fund, based on its latest holdings, so it has also been removed.
Brookvine has also closed the THB International Microcap Fund.
Capital H has merged its Active Fund with its Inception Fund.
Altor Alpha has rebranded to the Aliwa Fund.
Despite waiting until the end of July, some funds have still not finalised their June performance numbers or reverted back with requests for data, so if some of you see some“N/A” entries, you have some context as to why it may not be reported in the table.
The remaining universe shows a huge return disparity in returns across the various microcap funds. Still, there is no escaping from the overarching bear market that has beset ASX-listed microcap equities over the last 18-24 months. Hopefully, as I said at the top of the piece, we can see the light at the end of the tunnel, and that performance will start to turn before we lose more funds and managers.
The other trend that has maintained practically since I started doing these reviews is that ASX microcap stocks have outperformed global peers. However, UK microcaps got a nice bounce on renewed optimism for the financial services sector (post-Brexit) and the UK economy more broadly with the new Labour government coming into power and expectations of the BOE's first-rate cuts this Thursday.
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