Coffee Microcaps March 2024 Newsletter
Microcap Green Shoots, Growing Legs?
Hi Everyone
First, many thanks to all of the microcap investors who attended the live events in Melbourne and Sydney last month. It was great to see so many familiar faces and some new ones.
While we didn’t record the presentations, I have linked to the websites for the companies I found interesting and enjoyed listening to over the two events.
Cash Converters International (ASX: CCV)
Our next live event will be in Sydney on Tuesday, October 22nd, 2024 if you want to mark it on your calendars. Once we get the August reporting season out of the way, I will start finalising the agenda in September, and tickets will go on sale on October 1st via Humanitix.
I am also investigating running our first conference in Brisbane in October 2024. If you are Brisbane-based, please reply if you are keen to attend a live event so I can start to get a sense of the numbers for a possible Brisbane event.
I am also looking for any QLD-based ASX microcap companies you would like to see present at the conference, and I will start reaching out to them to present.
Microcap Green Shoots, Growing Legs?
The S&P/ASX Emerging Companies Index TR finished up +6.34% for the month of March 2024 and followed on from the +5.15% recorded in February 2024. As of COB yesterday, April 8th, 2024, the microcap index is at a new 52-week high. After a slow start, microcaps have outperformed the S&P/ASX Small Ordinaries Index TR and the S&P/ASX 200 Index TR year-to-date. It is early doors in 2024, and I, for one, will not call the end of this ASX microcap bear market, given the last two years, but I will take the positive momentum for now.
Anecdotally, I follow about 250 ASX microcap stocks on my watchlist, and while I don’t have any hard data just from looking at the list at the end of every trading day, there is a lot of green on the list most days and volumes, while still poor, seem to be improving. This gives me hope that this momentum in ASX microcaps can continue.
Also, a common refrain from both the companies presenting at the recent conferences and talking to ASX microcap investors around the edges of the conferences was that many microcap companies have better businesses (revenues, P&L, balance sheets, etc.) compared to 18/24 months ago. Still, share prices remain down 50%+ in many cases.
So, we are not out of the woods by any stretch of the imagination, but at least some green shoots are starting to show further growth.
Upcoming Coffee Microcaps Zoom Webinar Events
Our next event is this Thursday, April 11th 2024, with Close the Loop Ltd (ASX: CLG). You can register for the webinar here.
For anyone who doesn’t know, I regularly host presentations from ASX Microcap companies via Zoom Webinars. Two companies usually present on Thursday mornings from 9 a.m. to 10 a.m. AEDT Sydney time.
I want to 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 events, which are free to attend.
Please check the Coffee Microcaps social media pages for details on the times, dates, and presenting companies.
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, you can subscribe to the Coffee Microcaps YouTube channel and just hit the bell for notifications when new content gets 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.
Coffee Microcaps Morning Meeting, March 28th 2024
Firstly, Veris Ltd (ASX: VRS) joined us. Michael Shirley, CEO, talked about how they are turning around the business and moving it back into profitability. Over the last two years, Michael and the new team have focused on enhancing and expanding the product offering. Veris has also focused on getting the core surveying and planning business operating effectively and efficiently, following numerous acquisitions in that space over the last few years to build a national footprint. Getting a refresher on the Veris business was good; plenty has changed under the hood.
Secondly, we were delighted to welcome back Dennison Hambling from Intelligent Monitoring Group Limited (ASX: IMB). Dennison walked us through the first half after the ADT Security acquisition, which materially changed the revenue and EBITDA of the business and gave IMB significant scale. Dennison also highlights that they will actively focus on growing the business by targeting previous ADT clients to win them back or upgrade the client’s existing services. New business will also be a priority across residential, SME, and, in particular, aged care and healthcare over the next 12-24 months as these market sectors remain underrepresented in Australia regarding professional security solutions versus international markets.
You can watch the webinar recording on the Coffee Microcaps YouTube Channel.
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.
Given that we are still in a bear market here in ASX microcap land (notwithstanding the positive signs noted above), many microcap investors may be looking at some holdings and wondering what to do. This article from Microcap Club explains when averaging down in a position can make sense. If you have a few microcaps well underwater, this article could help you determine the next steps with those positions.
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