The ‘how-to’ of investing in small caps
The potential growth from investing in small caps can be alluring, but it does not come without risks. One way of mitigating these risks can be to keep a checklist of important factors to research. “Checklists force us to focus on process, and generally good process leads to good outcomes,” says Mark Devcich of Pie Funds. Having a checklist is good, but what goes on that list is what really matters. “To us, the key is free cash flow. How is their cash flow? Net cash on the balance sheet is always a positive sign. Cash is king, ” says Chris Stott from Wilson Asset Management. In this latest thematic discussion, Matthew Kidman from Centennial Funds gets a crash course from two successful small-cap managers who share insights into their process.
Buy Hold Sell is a weekly video series exclusive to Livewire. In each episode two fund managers give their views 'Buy, Hold or Sell' on five ASX listed companies. Not recommendations, please read the disclaimer and seek advice where appropriate.