It is currently trading at 12.4x annualized earnings, too cheap a multiple for such a high-quality, high-margin, and no-debt business. Despite soaring energy prices, it is still trading below pre-pandemic levels. It just sits back and collects royalty checks from oil and gas assets that it owns. It doesn’t have to spend any money to drill new wells. Micro-Cap Stock to Buy: Dorchester Minerals (DMLP)ĭorchester Minerals (DMLP) is an energy royalty company. Over time, I expect PX to continue to appreciate and wouldn’t be surprised if the stock traded at 20 or higher in a few years, nearly double PX’s current price (13).
#Best micro cap stocks july 2017 free
The company has considerable debt on its balance sheet, but a large portion of it is attractive seller financing.ĭespite its strong growth and reasonable balance sheet, PX trades at a significant discount to private equity peers such as Hamilton Lane, which trades at 20.2x free cash flow. Over the next several years, I expect the company to grow free cash flow significantly as its private equity business expands. P10 Holdings (PX) is an under-the-radar micro-cap operating in an extremely stable and profitable industry (private equity). 3 Micro-Cap Stocks to Buy Now Micro-Cap Stock to Buy: P10 Holdings, Inc. Let’s look at three micro-cap stocks that are better bets than BONZ.
In fact, Bonanza has subsequently given back that 1,000% gain and is now down 16% on the year. Because it had none of those characteristics, avoiding Bonanza was the right move at the time. When evaluating micro-caps, I’m looking for companies with 1) substantial growth, 2) conservative balance sheets, and 3) inexpensive valuations. This means that management has pumped up its stock price via promotional press releases and then sold additional stock, diluting existing shareholders. Third, the number of shares outstanding had grown exponentially. Despite touting “great” mining results, the company had failed to generate any revenue in its entire life (as far as I can tell). Second, the company had poor financial trends. It is a red flag when a company makes an acquisition in an industry (especially a “hot” industry) in which it has no expertise. Luckily, it didn’t take me long to conclude this was a name to avoid.įirst, the company – up until the announcement – had been a gold mining company. I decided to dig in to see what all the hype was about. Get My ReportĪs a result of the acquisition announcement, Bonanza’s stock surged up over 1,000%. Find out which stocks you should buy this month to make money in this volatile market.
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