Coffee Microcaps November 2022 Newsletter

Hi Everyone

Welcome to this month’s edition of the Coffee Microcaps newsletter.

It was a positive moment for the S&P/ASX Emerging Companies Index, which saw it close up 3.3%, although this lagged the S&P/ASX 200 Index, which closed up a robust 6.6% for November. However, one emerging trend is corporate activity in the microcap space due to depressed valuations. In recent weeks we have seen bids for Proptech (PTG), Janison Education (JAN), MSL Solutions and Mayfield Childcare (MYG), to name just some of the bids we have seen. Indeed these bids have, in some cases, come in at particularly big premiums to the last traded price and well over the 30% average premium normally associated with such M&A transactions. Hopefully, these corporate transactions can reignite investor interest in ASX microcap stocks as we move into 2023, as outsiders are clearly starting to see value on offer.

Coffee Microcaps Zoom Webinar Events

For anyone who doesn’t know, I regularly host presentations from ASX Microcap companies via Zoom Webinars. These events normally happen on Thursday mornings from 9 am - 10 am Sydney time, with two companies presenting.

I would like to thank DMX Asset Management 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” In other words, 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 of my subscribers. If you would like 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. These events are free to attend.

Coffee Microcaps Microcaps Morning Meeting

The last Coffee Microcaps Morning Meeting for 2022 is happening this coming Thursday, December 8th. I will have the following five ASX Microcap Companies presenting at this event.

Chris Noone, CEO of Carly Holdings Ltd (ASX: CL8) 9:00-9:30
Jim Bindon, CEO of Big River Industries Ltd (ASX: BRI) 9.30-10.00
Will Creedon, Founder & CEO of Alloggio Group Ltd (ASX: ALO) 10.00-10.30
Andrew Booth, CEO of Advanced Braking Technology Ltd (ASX: ABV) 10:30-11:00
Adem Karafili, Executive Chairman of Top Shelf International Holdings Ltd (ASX: TSI) 11:00-11:30

If you wish to join us, you can register for the event here

Coffee Microcaps YouTube Channel

All the Zoom events get recorded and uploaded to the Coffee Microcaps YouTube Channel. As well as the ASX microcap company presentations, I do interviews with 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.

I have added a stack of new content to the channel. You can click on any of the links below to watch the recent presentations.

Also, if you look in the description section of each video on YouTube, it has the relevant video 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 with Armytage Micro Cap Activist Fund

I recently sat down with Lee Iafrate, Portfolio Manager for the fund, and while we didn’t get into stock specifics, Lee did give a good overview of the fund and what sectors he sees opportunities in. This activist strategy is not something you will find many other active microcap managers pursuing, so it is certainly a differentiated offering in the market.

You can catch my interview with Lee here.

Coffee Microcaps Technology Conference

I recently ran a conference focused on ASX microcap technology stocks over two mornings in early November. If you didn’t manage to join us on the day, you can watch a replay of both sessions on the Coffee Microcaps YouTube Channel.

Quick Tip in the description box on YouTube, click on the timestamp for the relevant presentation if you want to jump to a particular presentation.

Coffee Microcaps Technology Conference Day 1

Tuesday 8th of November (Click the Link to Watch)

Nic Pollock, CEO of K2fly Ltd (ASX: K2F) 9.00-9.30
Rod Bishop, Co-Founder & MD of Jayride Group Ltd (ASX: JAY) 9.30-10.00
Andreas Kroell, CEO of De.Mem Ltd (ASX: DEM) 10:00-10:30
Christopher Clark, CEO of Delta Drone International Ltd (ASX: DLT) 10:30-11:00
Jamie Conyngham, CEO of Bridge SaaS Ltd (ASX: BGE) 11:00-11:30
Charif El-Ansari, MD of Dropsuite Ltd (ASX: DSE) 11:30-12:00

Coffee Microcaps Technology Conference Day 2

Wednesday 9th of November (Click the Link to Watch)

Gerard Dyson, MD of Spectur Ltd (ASX: SP3) 9.30-10.00
Kate Quirke, CEO of Alcidion Group Ltd (ASX: ALC) 10:00-10:30
Paul Gillespie, CEO of Smart Parking Ltd (ASX: SPZ) 10:30-11:00
Rene Sugo, CEO of Symbio Holdings Ltd (ASX: SYM) 11:00-11:30
Rob Broomfield, CEO of AVA Risk Group Ltd (ASX: AVA) 11:30-12:00

Coffee Microcaps Morning Meeting 1st of December (Click the Link to Watch)

Smartpay Holdings Ltd (ASX: SMP)

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.

This month I wanted to shout out a blog post from Swen Lorenz from Undervalues-Shares.com called Small-Cap Stock - Big Problems, Or Big Opportunities. I have been following Swen's blog for a while, and he put together a great article on why US small caps are undervalued by historical metrics. He also notes that US small-caps stocks performed really well in the 1970s as per the periodic style table of asset class returns that many of you will be familiar with. The 1970s were also characterised by high inflation and 2 separate energy crises. While the data is US-centric, and we are some 50 years on from the 1970’s economic structure, it was still an interesting read with the mindset of history not repeating but very much rhyming.

Thanks for reading

Mark Tobin