Coffee Microcaps November 2023 Newsletter
Microcap Fund Manager Interviews & Company Presentations
Hi Everyone
Some exciting news to start off with. Our next in-person conference will be in Sydney on Thursday, March 14th, 2024, so please mark the date in your calendars. I look forward to seeing you all there. Tickets will go on sale in February once we have a few companies locked into to present.
Microcap Fund Manager Interview, November 15th 2023
Given this microcap bear market, we are in, I have recently been catching up with a couple of microcap fund managers to see what stocks they are looking at. This past month, I caught up with two more portfolio managers. This time, we were joined by two microcap LIC managers.
The first PM is Joe Constable from the LIC H&G High Conviction Fund (ASX: HCF). Joe brought back one of his stocks from our interview a year ago in Centrepoint Alliance (ASX: CAF). An interesting story here, especially in the context of all the corporate activity happening in their sector. The second stock Joe discussed was Kinatico (ASX: KYP), who presented at our Sydney conference in October.
You can watch the recording of my interview with Joe on the Coffee Microcaps Channel below.
Microcap Fund Manager Interview, November 23rd 2023
The second PM up is Rob Miller from Naos Asset Management, which manages 3 LICs. Rob was joining us for the first time, and it was great to hear from him.
Rob chose another company that presented at our recent Sydney conference in Big River Industries (ASX: BRI). Big River has presented at many of our events in person and online, so hopefully, the business will be familiar to many subscribers. However, Rob outlined why they have been long-term investors in the business and continue to like the outlook for BRI.
Rob’s second choice is a business that hasn’t ever presented at Coffee Microcaps, but I will try to rectify that in 2024. Rob's second stock for the interview was MaxiPARTS Limited (ASX: MXI), which was a really interesting story with some nice industry dynamics in their favour.
You can watch the recording on the Coffee Microcaps Channel below.
Coffee Microcaps Morning Meetings
After a bit of a break from our online events due to work around the in-person event in Sydney, we got back on the horse last month with six companies presenting across two meetings.
Firstly, Dennison Hambling, CEO of Intelligent Monitoring Group Ltd (ASX: IMB), joined us for the first time. It was great to get an overview of the business after their large acquisition of ADT Security, the plans for growing it, and the cross-sell opportunities post-integration into the existing business. This business is in turnaround mode, and early indications are that Dennison and the new team involved at IMB are starting to find some traction.
Secondly, Paul Gillespie, CEO of Smart Parking Ltd (ASX: SPZ), joined us. It was great to have Paul join again and update us on how they are travelling. Paul noted that the business has now moved into profitability and is looking to drive the international expansion of its platform. The recent expansion into Germany is an example of that, and Paul noted they are looking in a measured way to enter other EU markets along with selected US states where they can implement their platform.
You can watch the recording on the Coffee Microcaps Channel below.
Our second Coffee Microcaps Morning Meeting was also our last for the year, but fear not, we went out with a bang with four companies presenting. Our next set of online events will be at the end of January 2024 and early February 2024 once Appendix 4c reports have been released by companies to the ASX.
Firstly, Steven Lydeamore, CEO of Immuron (ASX: IMC), returned to update us on how IMC is tracking since he presented our conference in Melbourne in May. Sales of Travelan products continue to grow in line with increased international travel post CV19 and the pursuit of new and previous sales channels in Australia and internationally. IMC also has multiple clinical trials in progress, which, uniquely in this space, are all funded by partners. IMC has $17 million in cash in the bank as per their last set of results, and they look in control of their own growth destiny.
Secondly, Amos Simantov, Founder and CEO of Way 2 Vat Ltd (ASX: W2V), joined us for the first time at a Coffee Microcaps event. Amos gave a great overview of the business and the value proposition it offers enterprise clients in terms of claiming back VAT/GST that is either too hard-basket for finance teams or slipping through the cracks from international travel and business. The business continues to sign new enterprise-grade clients and has a strong pipeline of others engaging with them. As someone who once worked in the finance department of a multinational, it sounded interesting.
Next up, we had Sam Riley, CEO and co-founder of Ansarada Ltd (ASX: AND). Sam was also back after a long absence to update us on how Ansarada is expanding its capability from its bread and butter of data room and compliance software around M&A deals to now covering government tenders, ESG compliance and more. Like anyone working in finance or probably any corporate environment, the rise of compliance has been noticeable over the last decade. Ansarada is positioning itself to be a player in these various parts of this market.
Finally, we had Dr Chris Richards, MD of Apiam Animal Health Ltd (ASX: AHX). Chris, a bit like Sam from Ansarada, was also joining us for the first time in many moons. Having been on a tear with M&A in the rural veterinary clinic space over the previous two years, Chris highlights that the focus now is squarely on extracting synergies and economies of scale from the formidable practice network they have built across the eastern seaboard of Australia. While selective M&A remains part of the strategy, the business has entered the next stage of its evolution.
You can watch the recording on the Coffee Microcaps Channel below.
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.
Anybody following the ASX microcap/small-cap stocks in Australia over the last 18/24 months will know that we have been in an extended bear market, although November provided some respite with a decent move up on reasonable volumes. Australian investors can take little comfort that markets like Canada and the UK have been mauled by even bigger bears. One would sure hope there is some value now to be had in the ASX microcap market, and many of the fund manager interviews I have referenced above and in prior weeks highlight valuations and opportunities not seen since the GFC, but none were as bold to call the bottom here. In light of these conditions, I think the latest post from Microcap Club regarding averaging down on your positions seems particularly pertinent currently. You can read the article from Ian Cassel, founder of Microcap Club, here.
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