We keep it simple and stay laser-focused on two things:
1) Revenue and earnings growth
2) Positive cash flows
Here are just a few of the winners this strategy produced for us recently:
• Biosyent licenses and markets specialty pharmaceutical products in Canada
• They stick to proven, approved drugs and risk no money trying to create their own.
• We first got into Biosyent at $1.20 in May 2013 after we became convinced the CEO was top-notch and could grow the business 50+% per year.
• The company delivered quarter after quarter and became a “must own” for small-cap funds in Canada.
• The stock has risen over 500% from our original purchase and the business shows no signs of slowing down
Biosyent’s chart really is a thing of beauty.
Covalon Technolgies (COV.V)
• Covalon makes anti-bacterial wound care products, such as films for the skin and IV coatings
• The company’s products provide a comfortable covering for the patient and help prevent infections while they receive care.
• We thought Covalon might be toast in August 2013 with the stock at $.14 and the company running out of cash – until they delivered a blow-out quarter of $0.03 per share in earnings and we saw insiders buy a big chunk of the stock.
• We began buying at $.15 and just two months later, Covalon announced a major licensing deal with Molnycke, the $3B leader in the wound care space.
• COV’s growth has been impressive until hitting a snag these last few quarters -- the stock is down, but still up over 500% from our original purchase price.