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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (54272)	8/16/2014 10:02:45 AM
From: E_K_S	1 Recommendation Recommended By bruwin Respond to of 78765

Value Investing - Small and Micro Caps Financial Information, ill-liquid market prices & understanding management's operational plans. Yahoo probably uses smart algorithms to drill down and gleen their financial data for their Yahoo Finance database. I am not sure if they go to the source like the SEC's 10K & 10Q's (which they should) or get it from an information provider like Thompson Media Group. I typically will also check Google Finance to see if they have the data. It is not unusual for the small caps and micro caps to have no data and/or incorrect data in the Yahoo Finance profiles. Perhaps that is why there are some undiscovered "value" gems in these small cap names. These small caps still have much less liquidity and/or only until the market bids up their price can the value be realized. I own a few micro caps but become frustrated because they are selling at a significant discount to what I perceive is fair value. The market is not very efficient in pricing these small cap companies. For example, one company I own is Goldfield Corp. (GV). They released their earnings last Thursday ( Goldfield Announces 2014 Second Quarter Results And Record Backlog). The stock was up over 20% on 26x their average daily volume. Their earnings were not exceptionally good but just did not have anymore significant one time write downs other than what was stated earlier and provisions were made for that "one-time" write down for a discontinued operation. With a $45Mln market cap an extra $1Mln here and there make a big difference in the company's valuation. I find that the underlining values may be there but market price seems to be set according to how management executes their operational plans. Many times changes (even in a small company) take longer and their impact on earnings and earnings growth may take several quarters to kick in. So, until Revenues and EPS are reflected in the income statement and buyers line up at the door to buy the stock will one see any significant sustained move in these micro & small cap stocks. Typically they fall faster than they go up so I try to be out the door on any significant shortfall and/or bad news and in early buying cheap undervalued shares. FWIW a few other undervalued (and work in progress) micro/small cap companies I own include: Neptune Technologies & Bioressources, Inc. (NEPT); International Barrier Technology Inc. (IBTGF); Good Times Restaurants Inc. (GTIM); Armanino Foods of Distinction Inc. (AMNF) & Aurcana Corporation (AUNFF). Each has a different story and their own value propositions. EKS