The long-term microcap investor rarely finds a time that is as ideal as it is right now to be selectively buying, especially in profitable Canadian microcaps. Profitable Canadian microcaps are trading at some of the lowest valuations than I’ve seen in a long time.
There are lots of microcap companies with impressive results and lots of these companies are cheap. You are going to find more bargains in down markets when it’s hard to find the courage to buy them. The opposite is true in up markets.
To get a big winner it helps to start with a cheap stock. These stocks need to be growing fast (compounding) and they need PE ratio expansion. You’re more likely to see PE ratio expansion if you start with a small PE ratio. It’s what I witnessed with Xpel Technologies, Biosyent, Hamilton Thorne, Bowflex, Medifast and so, so many others. These were all single digit PE companies growing revenues well into double digits per year. This is exactly what I’m seeing in our universe of Canadian microcap stocks right now.
Stay tuned as Trevor and I are putting the finishing touches on a new “Cheapies” list. This one will be full of double-digit revenue growers trading at single digit PE ratios. This Week’s Canslim Contender
Hudson Technologies (HDSN – Nasdaq) Closing Price: $10.48
Hudson Technologies, Inc. is a leading provider of innovative and sustainable refrigerant products and services to the Heating Ventilation Air Conditioning and Refrigeration industry. For nearly three decades, we have demonstrated our commitment to our customers and the environment by becoming one of the first in the United States and largest refrigerant reclaimers through multimillion dollar investments in the plants and advanced separation technology required to recover a wide variety of refrigerants and restoring them to Air-Conditioning, Heating, and Refrigeration Institute standard for reuse as certified EMERALD Refrigerants(TM). The Company's products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide(TM) Services performed at a customer's site, consisting of system decontamination to remove moisture, oils and other contaminants. The Company's SmartEnergy OPS(TM) service is a web-based real time continuous monitoring service applicable to a facility's refrigeration systems and other energy systems. The Company's Chiller Chemistry(TM) and Chill Smart(TM) services are also predictive and diagnostic service offerings. As a component of the Company's products and services, the Company also generates carbon offset projects. |