{"id":384,"date":"2015-09-03T15:57:00","date_gmt":"2015-09-03T22:57:00","guid":{"rendered":"http:\/\/smallcapdiscoveries.com\/?p=384"},"modified":"2022-01-11T12:46:44","modified_gmt":"2022-01-11T20:46:44","slug":"paul-andreola-talks-about-smallcap-stocks-on-bnn","status":"publish","type":"post","link":"https:\/\/smallcapdiscoveries.com\/articles\/paul-andreola-talks-about-smallcap-stocks-on-bnn\/","title":{"rendered":"Paul Andreola Talks About Smallcap Stocks on BNN"},"content":{"rendered":"

Paul Andreola Talks About Smallcap Stocks on BNN<\/h2>

\"\"Small cap stocks can offer big potential returns but often with heightened risk.And to cut down the potential dangers our next guest says he screens all Canadian listed small caps manually reviewing their quarterly and annual financial statements.Joining us now is Paul Andreola; he\u2019s the Editor of a newsletter called, Small Cap Discoveries. Paul thanks so much for joining us.<\/p>\n

Paul:<\/strong> Happy to be here.<\/p>\n

Amber:<\/strong> Let\u2019s start with Venture and it\u2019s been absolutely been beaten up. Most of those are resourced types of names but you have seen some, even the smaller tech players get caught up in that. It\u2019s been a tough environment.<\/p>\n

Paul:<\/strong> Yeah it has. I think and that\u2019s probably driven by obviously the different dynamics that are going on around the world, things like lower oil prices, currencies. I think you\u2019re seeing a lot of things that are influencing the large caps but more specifically the small caps.<\/p>\n

Amber:<\/strong> You see a lot of stocks on there that don\u2019t have analyst coverage, that don\u2019t have a long track record. So take us through some of the homework that you do in your process to make sure you\u2019re getting the full picture of a company.<\/p>\n

Paul:<\/strong> Sure. I work with a young man out of the US with an extremely analytical mind, good researcher. What we do is we actually screen every single financial statement that comes out on CEDAR (Sp? 1:19) on a daily basis. In some cases, during earning season there will be hundreds during the day.<\/p>\n

And when we go through those we take a bottom up approach when we look for investing. So we\u2019re looking for organic growth in both revenues and earnings and specifically looking for other things.<\/p>\n

Once we qualify the company growing at a rate that we want then we start doing a lot more homework and digging deeper into things like share structure and ownership positions of mangement and things like that.<\/p>\n

Amber<\/strong>: What\u2019s the ratio of quality out there? So for every 30 companies that you evaluate how many gems are there really?<\/p>\n

Paul:<\/strong> I\u2019d say maybe 1 out of 100 if we\u2019re lucky.<\/p>\n

Amber:<\/strong> Wow!<\/p>\n

Paul:<\/strong> We see 5 to 10 really good stories a year, its slim pickings sometimes.
\nInterviewer: So what sectors do you like and which ones would you avoid in this kind of environment?<\/p>\n

Paul:<\/strong> So what we avoid is the resource sector and more because it\u2019s hard to find anything in the resource sector that\u2019s repeatable. We\u2019re looking for businesses that in some cases have recurring revenue or repeatable revenue.<\/p>\n

So sectors that we seem to fall into are software and we\u2019ve been quite fortunate in the farm and bio-tech sector. And then there\u2019s a lot of eclectic businesses that we\u2019ll stumble upon.<\/p>\n

Amber:<\/strong> Let\u2019s talk about one of the bio-tech ones that\u2019s Microbix Bio-Tech Systems. Give us a little background and what you think the upside is.<\/p>\n

Paul:<\/strong> Yeah, the reason we like Microbix is they have a core business in the antigen (sp? 2:57) development or drug testing business. They\u2019re growing at about 10 to 15% in their core business, but they also have 2 pipeline products that are very late stage that we think could be blockbusters.<\/p>\n

Both are very close to monetization and they\u2019re looking for partners right now so they\u2019re not\u2026the company itself isn\u2019t spending a lot of money pushing these forward.But yeah both of them we think have the potential to move the stock multiples from where it is right now.<\/p>\n

Amber: <\/strong>Given your wheelhouse I imagine you\u2019ve analyzed patient home monitoring a couple of times. What are your thoughts?<\/p>\n

Paul:<\/strong> We found it early and unfortunately missed it early and then we watched it keep going from there.<\/p>\n

We try to stay away from companies that are sort of over exposed, companies that have had the opportunity to be seen by all the analysts and all the bigger investors. We\u2019re trying to find them before these guys come to these deals.<\/p>\n

So for us now it\u2019s long gone and we\u2019re looking for the next\u2026<\/p>\n

Amber:<\/strong> Even on the pull back, PHM on the Venture if we can pull up the chart.<\/p>\n

Paul<\/strong>: Yeah even on the pull back. Like I said, we prefer to find companies before the masses do. We think we get the best what we call \u201cdiscovery\u201d opportunity when we\u2019re looking at companies that others aren\u2019t.<\/p>\n

Amber:<\/strong> Okay thank you very much for your thoughts.<\/p>\n

Paul:<\/strong> You\u2019re welcome and thank you.<\/p>\n

Amber:<\/strong> That was Paul Andreola, Editor of the Small Cap Discoveries newsletter.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section>\n","protected":false},"excerpt":{"rendered":"Paul Andreola Talks About Smallcap Stocks on BNNSmall cap stocks can offer big potential returns but often with heightened risk.And to cut down the potential dangers our next guest says he screens all Canadian listed small caps manually reviewing their quarterly and annual financial statements.Joining us now is Paul Andreola; he\u2019s the Editor of a...","protected":false},"author":2,"featured_media":1161,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"_links":{"self":[{"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/posts\/384"}],"collection":[{"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/comments?post=384"}],"version-history":[{"count":1,"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/posts\/384\/revisions"}],"predecessor-version":[{"id":1484,"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/posts\/384\/revisions\/1484"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/media\/1161"}],"wp:attachment":[{"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/media?parent=384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/categories?post=384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/smallcapdiscoveries.com\/wp-json\/wp\/v2\/tags?post=384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}