What to look for in small-cap growth

Dean Fergie, Director & Portfolio Manager at Cyan Investment Management, has a focus on growth companies in the $50m-$100m range. In order to meet his standards, the companies need to be generating revenues. “There’s a number of stocks out there that are really not generating any revenues at all – they’re ideas, but they haven’t been commercialised. If they aren’t producing receipts from customers, we’re not involved in it.” Other factors they look for include some history of growth, and a plan to move into profitability in the next 1-2 years. “If we can’t see that, it’s just too far down the risk spectrum for us to invest.” In the video below, he expands on these points and shares some of the areas he’s been finding stocks that meet his criteria.