Small/Micro cap stocks

[Bullionaire]

Anyone got any small cap stocks that they are invested in or following at the minute? A lot of the talk on the other threads is obviously about large stocks, but I thought it might be interesting to talk about more speculative plays here.  

NOTE. Small cap stocks are obviously highly risky. I would not suggest that people put a large % of their money in any single small cap stocks as its very easy to get burned with them. Don't just invest in something because someone on a forum thinks it will have a big payday soon. I have most of my invested money in less risky, diverse index funds and investment trusts.

 

A small company I'm invested in at the minute (and have been for a year or two) is Nanoco (NANO). Around a £50m market cap at the minute. They design, manufacture and hold the IP for Cadmium Free Quantum Dots - these are used in TV's to give better colours as well as having other potantial uses such as infra red sensors, camera technology, augmented reality headsets etc. The main thing happening at the minute is that they are suing Samsung in the USA for allegedly stealing their IP and using it in all of their QLED TV's (which has made samsung additional profits of around $14b). Samsung were initially working with NANO to develop this technology a few years ago, but one day pulled the plug and decided to source the dots from another (samsung family owned) business... Very interesting case that could bring about a settlement or court awarded damages in the hundreds of millions, if not billions.

[SierraWhiskyMike]

Not public stocks but I do a bit of dabbling in private equities via Crowdcube. 

£1000 across 10 companies this year. Hopefully at least one makes my money back but it's entirely speculation and you have to assume that the cash isn't coming back. On the other hand, most are EIS/ SEIS so you get a 30%/50% tax rebate from HMRC in April, which means that they basically cost me £500-700.

Last time I invested in private equities, my £300 investment in a little known company called BrewDog paid me £8,700 a decade later which funded my postgraduate education. High risk but high reward!

[Bullionaire]

39 minutes ago, SierraWhiskyMike said:

Not public stocks but I do a bit of dabbling in private equities via Crowdcube. 

£1000 across 10 companies this year. Hopefully at least one makes my money back but it's entirely speculation and you have to assume that the cash isn't coming back. On the other hand, most are EIS/ SEIS so you get a 30%/50% tax rebate from HMRC in April, which means that they basically cost me £500-700.

Last time I invested in private equities, my £300 investment in a little known company called BrewDog paid me £8,700 a decade later which funded my postgraduate education. High risk but high reward!

Nicely done!

 

I have heard about the EIS in the past, but had no idea how to get involved in it. Probably for the best!

[SierraWhiskyMike]

Just now, Bullionaire said:

Nicely done!

I have heard about the EIS in the past, but had no idea how to get involved in it. Probably for the best!

Yeah it's super-risky so definitely *not* my main investment strategy!  Still, it's a nice addition to the asset mix I guess.  Offsets my ultra-conservative "overpay the mortgage" regular investment.  

I like start-ups mainly because of the growth potential but also partly because it's like supporting a plucky underdog company.  I don't "enjoy" paying into long-term index funds, that's just a smart investing strategy, but with start-ups you get to genuinely help out someone trying to make and sell something cool and new. 

If you're ever tempted though you should *definitely* spread your experimental fund across several start-ups to reduce risk and never put in money that you can't afford to completely lose because there's a good chance that 20% of them just collapse.  Due diligence is critical and even that can be ropey as a lot of the crowdcube companies are "poetic" about their actual profit and loss sheet and/or asset lists.  For example, the share platform Freetrade was on crowdcube this year with a lot of hype but if you looked at the fundamentals of the business their sales pitch was at best optimistic - nothing necessarily wrong with that but I was uncomfortable putting money into a company that isn't up front about its slower than anticipated growth and its dilution of individual investors' holdings.

EIS/ SEIS is really a private equity thing.  The company has to register itself as eligible first, which is usually done 'in principle' then confirmed after its equity fundraising by HMRC.  It's a good way to de-risk investing in start-ups (also makes later sales of these shares CGT free as an added bonus) but it's a dead giveaway of a high risk investment.

[SilvergunSuperman]

I mentioned this in a post elsewhere, but I am interested in an Australian company called Brainchip (BRN on the ASX). They do artificial intelligence and machine learning chips for use in such things as motion sensors and image recognition etc.

They have recently announced development agreements with Ford and Valeo, and a couple of weeks back finished the first fabrication of their latest chip which is in testing now. This caused a doubling of the share price but they're still just a 150 million AUD company. Definitely one to keep an eye on as their new chip technology could be game-changing in the industry.

This is a good intro for anyone interested (a bit techy but easy to follow I think)

https://brainchipinc.com/wp-content/uploads/2020/05/BrainChip_tech-brief_6-How-BrainChip-is-Changing-AI_v1.2.pdf

[SilvergunSuperman]

On 18/07/2020 at 09:01, SilvergunSuperman said:

I mentioned this in a post elsewhere, but I am interested in an Australian company called Brainchip (BRN on the ASX). They do artificial intelligence and machine learning chips for use in such things as motion sensors and image recognition etc.

They have recently announced development agreements with Ford and Valeo, and a couple of weeks back finished the first fabrication of their latest chip which is in testing now. This caused a doubling of the share price but they're still just a 150 million AUD company. Definitely one to keep an eye on as their new chip technology could be game-changing in the industry.

This is a good intro for anyone interested (a bit techy but easy to follow I think)

https://brainchipinc.com/wp-content/uploads/2020/05/BrainChip_tech-brief_6-How-BrainChip-is-Changing-AI_v1.2.pdf

Since posting this the Brainchip share price has gone from 11c to 50c, in large part due to the announcement of a partnership with a NASA contractor looking to use the tech in space flight.

https://brainchipinc.com/brainchip-and-vorago-technologies-agree-to-collaborate-through-the-akida-early-access-program/

 A very interesting company which seems to have suddenly caught the eye of the investing media etc.