Microcap Momentum: Diagnosing Opportunities, Powering Data Centers, and Diving Into Defense [GeoWire Weekly No. 192] | 🇺🇸 ATGN CODA 🇨🇦 INX.V

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This Week’s Microcap Information Arbitrage Weekly Wrap-Up is ready — spotlighting key moves, missed signals, and overlooked opportunities in our 1,500+ coverage universe built since 2009. 

Even though last week was a relatively unexciting week of news, I was incredibly excited to be featured on The Idea Brunch Substack investor interviews series, which I’ll dive into in a moment.

Missed any emails this week? You can catch up on all of them in one place — just check out the full archive here.

One of this past week’s morning emails featured a bold thesis from a Geoinvesting premium subscriber on a diagnostics firm nearing profitability and what he feels is trading at what looks like a steep discount to peers. We are always looking for a good medical device company due to our megabagger win with Koru Medical Systems, Inc. (NASDAQ:KRMD).

On the tech front, a micro-cap engaged in manufacturing networking equipment finally confirmed the early data center opportunity we first sniffed out weeks ago. 

Longtime model portfolio holding Altigen Communications, Inc. (OTCQB:ATGN) also got a fresh vote of confidence from respected investor @MikeDDKing, who called it his largest position. Recall that three weeks ago, we published our interview notes with Mike. 

Over in the subsea world, Coda Octopus Group, Inc. (NASDAQ:CODA) blew past revenue estimates while expanding its footprint in direct government sales, especially with its DAVD diver systems. DAVD (Diver Augmented Vision Display) is Coda Octopus’ proprietary underwater head-up display (HUD) system that streams real-time sonar, video, and data directly into a diver’s mask. After delays tied to defense procurement cycles, DAVD is now expected to be a key driver of the company’s long-awaited return to growth as adoption expands, especially within the U.S. Navy.

It’s going to be very interesting to see how CODA and other subsea stocks that we cover react on Monday morning, due to oil prices spiking in reaction to the United States getting involved in the Iran-Israel war. We believe that one of these stocksis a sleeper that’s about to get very timely due to information arbitrage we talked about last week, that investors are just figuring out exists.

Lastly, Intouch Insight Ltd. (OTC:INXSF) continued to build out its brand merchandising platform with a small bolt-on acquisition.

“Idea Brunch” with Maj Soueidan: Finding Microcap Clarity in the Noise

I want to thank Edwin Dorsey, founder of the Idea Brunch Substack, for inviting me to be a guest interviewee.  In the “Idea Brunch” interview, I had a chance to unpack my own investing journey—how GeoInvesting came to be, what I look for in a multibagger, and why press releases might be a key investing best edge in a short-attention-span market. 

“Sunday’s Idea Brunch is an interview series spotlighting sharp, contrarian investors who share their highest-conviction ideas and walk through how they research them.”

I had a blast reflecting on my 30+ year journey as a full-time investor—from cutting my teeth with the Value Line in college libraries to launching GeoInvesting as a way to prove you can beat the market by digging into microcaps with the right process.

One of the main themes we hit on was my obsession with qualitative edge and timing:

“Even if you are a long-term investor, let’s face it, we can’t ignore the time value of money… There’s enough opportunity among the 10,000 microcaps in North America that you don’t have to wait five years to nab a five-bagger.”

We also discussed the DNA behind GeoInvesting and the Microcap Investing Cliff Notes Substack:

“In a nutshell, the difference between the two platforms is this: GeoInvesting is more of a bundle of products—morning emails, Sunday wrap-up emails, model portfolios, video interviews with investors, CEOs, and experts, and a monthly open forum event where we recap what happened in our universe over the previous month. It’s designed for those who want to do their own research, but also appreciate direct ideas via model portfolios that are backed by research.

The Substack is more oriented toward those who want to increase their idea flow. Think of it as an earlier look at my full research pipeline. It’s also centered around the goal of creating the first-ever index of high-quality microcap companies and high-probability turnarounds: MS Microcap Quality Index (MSMqi).

• M = Momentum in Price
• S = Sustainability of Business
• M = Microcap
• Q = Quality

I actually created the index in February 2022 and tested the concept with about 20 subscribers from Geoinvesting. There are currently 115 stocks in the index, and its performance has been pretty spectacular, with 48 multibaggers (so over a 40% hit rate). Each stock added to the index is accompanied by a Cliff Note detailing the reasons we added it to the index, valuation, risks and additional research tasks that we need to accomplish. The intent is to help those who enjoy doing research sift through all the noise to find the most investable microcaps hitting multibagger markers. We add about 1 to 3 stocks per month to the index. The Substack team consists of my brother, Zou, and Jan Svenda.

There is some cross-pollination of ideas between the two platforms. I’ve recently partnered with some quantitative analysts who will rank the MSMqi using a multifactor analysis to help subscribers more easily navigate it. About 25% of our Geo members also subscribe to the Substack.”

I’m humbled that the interview was well received:

You can read the entire interview here.

Over the past week, I’ve had a chance to read over some Idea Brunch interviews. Edwin is doing a great job at finding some of the best investors to interview. I encourage you to check out the Idea Brunch Substack here.

Edwin is also  the founder of the Bear Cave Substack. You can follow Edwin‘s social handles here:

• Edwin Dorsey,  @StockJabber
• Idea Brunch, @IdeaBrunchEmail
• The Bear Cave, @BearCaveEmail
• SEC FOIA Search, @FOIAsearch

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Now, onto a NEW bullish pitch by a Geoinvesting contributor. We’ve begun digging into the story.

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200+ multibaggers and counting

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GeoInvesting is a premier research platform for microcap investors, dedicated to uncovering high-potential stock ideas in undervalued companies across various sectors. With over 30 years of investing experience, GeoInvesting has covered more than 1,500 equities, providing often actionable proprietary research. The platform has been instrumental in identifying 200+ multibagger stocks, and offers investors exclusive access to over 600 management interview clips, allowing for deeper due diligence and understanding of the microcap stocks, many of which make it to market-beating premium Model Portfolios. Join the GeoInvesting community for the best stock research and microcap insights to help you stay ahead in the market. To learn more about our Premium Services, go here.. (https://geoinvesting.com/premium-research/)

The post Microcap Momentum: Diagnosing Opportunities, Powering Data Centers, and Diving Into Defense [GeoWire Weekly No. 192] | 🇺🇸 ATGN CODA 🇨🇦 INX.V appeared first on GeoInvesting.

Source: https://geoinvesting.com/microcap-momentum-diagnosing-opportunities-powering-data-centers-and-diving-into-defense/