Today, I’m recommending a liquidating real estate trust with significant upside.
Key points:

• •Its assets are conservatively worth 50% more than its current market cap (it has no debt).•It pays a 10% dividend yield.•Ongoing asset sales will create even more income and the trust will be completely liquidated within 5 years.

All the details are inside this month’s Issue. Enjoy!

Today, I’m recommending a U.K. natural gas company that is trading at a ridiculously cheap valuation and is run by capable operators who generated a 40x return on their last natural gas company.
Other key points:

• •It’s benefitting from the booming natural gas market in Europe.•It’s trading at 1.5x free cash flow.•It has high insider ownership (20% of the company).

All the details are inside this month’s Issue. Enjoy!

Today, I’m recommending a company that has grown revenue at a 30% CAGR and EBITDA an 80% CAGR over the past 10 years. Despite this impressive growth, the company trades at just 5.3x EBITDA.
Other key points:

•Top 3 player in the U.S. paper shredding industry.•Massive opportunity for organic and acquired growth.•High insider ownership (over 30% of the company).

All the details are inside this month’s Issue. Enjoy!

Today, I’m recommending a company that will benefit from the post-pandemic travel boom.
Other key points:
•145% quarterly revenue growth
•Cheap valuation: 5.7x EBITDA
•Hidden high-growth payments division
•High insider ownership (21% of the company).
All the details are inside this month’s Issue. Enjoy!

Today, I’m recommending a company that provides the “picks and shovels” to the massive Alzheimer’s market.
Other key points:

•High insider ownership (30% of the company).•45%+ revenue growth this year.•Secular winner trading at P/E of 33x.

All the details are inside this month’s Issue. Enjoy!

Today, I’m recommending an app developer that I previously recommended (we exited for a 114% gain last year). The business is growing like crazy yet trades at a dirt-cheap valuation.
Other key points:

• High insider ownership (19% of the company).
• 25%+ revenue growth this year.
• 34% of its market cap in cash and no debt.

All the details are inside this month’s Issue. Enjoy!

Today, we are making a “jockey bet”. In other words, we are betting primarily on the management team. The management team that we are betting on is responsible for some incredibly value creation in public markets (hint: it’s the same management team as P10 Holdings (PX), a stock that is up over 300% since or original recommendation in 2020).
Other key points:

• Trades at a cheap valuation.
• Paid a special dividend worth over twice its current stock price last year.
• High insider ownership.

All the details are inside this month’s Issue. Enjoy!

Today, we are recommending a special situation. The stock is a closed-end fund that is in the process of transitioning to a real estate investment trust (REIT). Once the transition is complete, the universe of investors that can buy the stock will double, driving indiscriminate buying pressure. Other key points:

• Trades at a 40% discount to NAV.
• High insider ownership (CEO owns 14% of company).
• Relentless insider buying.

All the details are inside this month’s Issue. Enjoy!

Today, we are recommending a rapidly growing bank that is based in Nashville, Tennessee. It looks like a very attractive long-term holding:

• High insider ownership (insiders own ~20% of shares outstanding).
  
• Strong momentum (stock is near 52 week high).
  
• ~17%+ historical earnings growth.
  
• Low valuation: P/E ratio of 13x.
  
• ~43% upside to fair value.

All the details are inside this month’s Issue. Enjoy!

Today, we are profiling a micro-cap bank that is focused on serving an attractive niche, the litigation industry. It looks highly compelling:

• High insider ownership (insiders own ~12.5% of shares outstanding).
  
• Strong momentum (stock is near 52 week high).
  
• ~20%+ earnings growth for the foreseeable future.
  
• Low valuation: P/E ratio of 12x.
  
• ~60% upside to fair value.

All the details are inside this month’s Issue. Enjoy!

Today, we are recommending a South African company that trades in the U.S. It looks highly compelling:

• High insider ownership (insiders own ~45% of shares outstanding)
• Strong momentum (stock is near 52 week high)
• 100%+ revenue growth
• Reasonable valuation: P/E ratio of 13x
• Low share count (only 5.4MM shares outstanding)
• No debt

All the details are inside this month’s Issue. Enjoy!

Today, we are recommending a small Canadian specialty pharma company that checks all the boxes of what we typically look for:

• High insider ownership (insiders own ~41% of shares outstanding)
• Recent insider buying (insiders bought as recently as August 21)
• Strong momentum (stock is near 52 week high)
• Low valuation (P/E of 5.2x)
• Low share count (only 26MM shares outstanding)
• Strong revenue growth potential (promising pipeline)
• No debt (29% of market cap is in cash)

All the details are inside this month’s Issue. Enjoy!

This week, I wanted to highlight two quick things before getting into our regular update.

First, I’ve talked a lot about the biotech bear market and how it’s lasted longer than most previous biotech bear markets.

I just stumbled upon the below chart on Twitter which shows the length of the current biotech bear market versus the previous three.

As you can see, the bear market is getting a little long in the tooth.

April is a big earnings month for large-cap stocks. A few of our companies (Esquire and Redishred) have reported earnings but most will report in May or June.

This week is school vacation week in Massachusetts, so I’ve spent the last five days in Puerto Rico with my family and a couple other families.

Highlights include:

1) Hiking into El Yunque rainforest for a swim in a little creek.

2) A night bioluminescent tour.

3) Lots of delicious margaritas!

In terms of micro-cap updates, it was a quiet week so I figured I would spend my update on Unit Corp. (UNTC) as I spoke to the CFO last week and got some good updates.

The big news this week is that OPEC+, including Russia, made the decision on Sunday to cut oil production by 1.16MM barrels per day from May through the end of the year. It appears that OPEC+ wants to keep oil in the $80-$90/barrel range.

I’ve never liked gambling. I went to Las Vegas once with friends and had a blast. But that was because the weather was beautiful, and we sat by the pool during the days and then had some good nights out. Some of my friends loved to play blackjack. I enjoyed it for entertainment value, but I was only interested in playing at tables with low minimums. Why? Because I know that the house always wins! (Unless you are Edward Thorp, the famous card counter.)

This week, all everyone cares about is the banking system, and so I’ve been thinking about it a lot. I continue to believe that this banking crisis is manageable and NOT systemic. Here’s how I see it…

For my introduction this week, it feels like I can’t write about anything other than Silicon Valley Bank. What a stunning collapse! And before I get into my thoughts, I wanted to plug using Twitter.

As expected, the second half of February was pretty weak from a stock market return perspective.But February is over and March and April tend to be seasonally strong, according to Ryan Detrick of Carson Investment Research.

This week, I want to use my introduction to spend some time diving into Liberated Syndication (LSYN) because I spoke to the CEO, Brad Tirpak, for about an hour last week.


To review, Liberated Syndication stopped trading publicly in late 2021 because it was so behind on its historical financials, that FINRA/SEC revoked its ability to trade. So since late 2021, the stock has been private.

For the first time that I can remember, I didn’t watch the Super Bowl. We had been skiing all weekend in New Hampshire, and I was EXHAUSTED. I think our entire household was asleep by 8 p.m. It sounded like an incredible game, but I’m not upset I missed it. An amazing night of sleep was worth it. Maybe that means I’m getting old?

The stock market finished January on a strong note which bodes well for the remainder of the year. Despite a rally in the market, I’m adding new ideas to my watch list on a weekly basis. I’m continuing to find plenty of ideas that look attractive on an absolute and relative basis. I look forward to sharing my latest idea in next week’s new issue of Cabot Micro-Cap Insider.

The S&P 500 is off to an excellent start in 2023 and according to Ryan Detrick of Carson, that bodes well for the rest of the year. I’m continuing to see many opportunities in the micro-cap world. The two areas that seem the most interesting to me right now are the biotech and energy sectors.

Last night, Medexus Pharma (MEDXF) reported excellent results. Revenue increased 70% y/y to $31.5MM in the quarter. While that top-line number benefitted from ~$3MM of sales that slipped from last quarter to this quarter, it was nonetheless a very positive report. Adjusted EBITDA increased to $5.1MM from a mere $700,000 a year ago.

Zedge (ZDGE) has appreciated a lot faster than I had anticipated. It is up over 100% since we profiled the name last month and is trading above my fair value estimate of $9.80.

Late last week, P10 Holdings (PIOE) announced another transformative acquisition.

Rich is recommending a sell for this portfolio stock.

Today, this portfolio stock published a press release that it will make a $1.35 per share distribution on October 27.

I usually wait until the second Wednesday of the month to share my latest micro-cap recommendation with you, but in this case, I couldn’t wait.

Given the market pullback, a couple names on my watch list are looking particularly interesting. I haven’t completed my analysis yet, but stay tuned—all of these names could ultimately make their way into the Cabot Micro-Cap Insider portfolio.

This morning, this portfolio stock announced that it has reached an agreement to sell its midstream business.

This morning, this portfolio stock reported results for the fiscal year ending March 31, 2020.

This Cabot Micro-Cap Insider recommendation moves to Hold.