SSH
Nextgames
Nanoform
Faron
Rush Factory
Heeros
Efecte
Bittium
Basware
Marimekko
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It’s been quiet in the thread. I’m putting together a small-cap portfolio, for which I’m trying to find potential growth companies, maybe a maximum of 10 companies without country restrictions. I believe now is a good time for it. What kind of companies would you personally put in such a portfolio now and why?
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Yeah, it would be nice to get more discussion on this. I haven’t had enough time to research small-cap companies. And my stock-picking history regarding small-cap companies isn’t exactly stellar. For example, in my monthly savings portfolio on my AOT account, I have a Swedish small-cap ETF. Of course, some special gems for direct investments might be found among them. Here’s a list of those stocks:
It depends on risk tolerance. Among domestic ones, Herantis and Faron are part of my selection. They are either 10-baggers or losers.
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I also have Faron and Herantis, and both will almost certainly succeed…
Biohit definitely belongs to the same group. A biotechnology company making about 17-18% profit is a rarity… no competition… in Acetium and Gastropanel. There is competition in testing devices and the colorectal cancer test.
Nexstim is quite certainly a multi-bagger. Additionally, possibly Herantis. Faron, however, is quite uncertain.
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I would also highlight Aiforia. They are market leaders in a small niche segment (pathology AI solutions).
They have a strong position in the pathology value chain within an industry where the implementation of new operating models and technology is laborious. This means that once a good position is achieved, margins are strong and the competitive advantage is permanent.
Indeed, one can find rapidly growing investment opportunities in medical stocks. At the beginning of the pandemic, I invested money there. I had a couple of good hits, like Moderna, which I got into early, but I messed up a lot with a few other stocks. I got a bit of tunnel vision and then put too large a percentage of my cash into high-risk stocks. And in hindsight, I went in too early unnecessarily. And with little information. And small pharmaceutical companies often need many stock offerings and failed tests along the way.
Now, however, it occurred to me that psychedelics might be a really big thing in the near future, given the prevalence of depression and PTSD after wars and conflicts.
Has anyone looked into this?
(Not investment advice!)
Compass Pathways
“We have commenced a phase 3 clinical program of COMP360 psilocybin treatment in TRD, the largest randomized, controlled, double-blind psilocybin treatment clinical program ever conducted. Previously, we completed a phase 2b study with top line data showing a statistically significant (p<0.001) and clinically relevant in depressive symptom severity after three weeks for patients COMP360 psilocybin with psychological support. We have completed an open label phase 2 study of COMP360 psilocybin treatment for post-traumatic stress disorder (PTSD), and we are currently conducting a phase 2 clinical study in anorexia nervosa.”
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Cannabis and mushroom companies seemed to be some of the hype targets during the COVID era. If I remember correctly, there is/was also a cannabis company thread here (for some reason I couldn’t find it) and additionally this magic mushroom thread:
The discussion apparently continued with a message very much reflecting the spirit of the times when I opened the thread 
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For example, that Compass Pathways stock price seems to have been double a year ago, and three times what it is now two years ago.
Past performance is no guarantee of future results, well, hopefully not in this case
I’ll have to read more about this someday to see how speculative an investment it is. If phase 3 is already underway, then there are usually pretty good indications of the treatment’s effectiveness.
Let me put my own guess now, so we get some life here.
Biostem ( BSEM )
The company’s market cap is 252M, but revenue was over 100M in the last quarter, growing rapidly.
Product: Makes patch/dressing-like products that contain (as I understand it) placental hormone.
They receive the material as a donation after childbirth.
Hyper-grower (over 100%) per year, margin over 90%.
Addressed market: In the United States alone, there are millions of elderly people, often diabetic patients, whose wounds in the lower extremities do not heal on their own or after surgeries.
Protocol for the product: If wounds do not heal within 6 weeks after surgery, doctors can prescribe this product, although nothing prevents, for example, using this product immediately after cosmetic surgeries to speed up wound healing.
Where from: USA Pink Sheets (Nordnet shows the ticker but does not allow buying, citing caution reasons).
According to the company’s own announcement, they are moving to Nasdaq’s main list now during Q1.
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I have started to willingly exclude loss-making and cash-burning small companies. I can give an opportunity if it seems that the company is about to turn profitable in the near future. This allows me to filter out the majority from a large mass right from the start.
Sufficiently large insider ownership (over 10%), nurturing the stock (no lax attitude towards dilution), a low number of shares (preferably under 100 million), and a sufficiently small market capitalization (preferably under 100 million) pique my interest, though I can and have been flexible on a case-by-case basis if I get a good gut feeling about the overall picture. A big plus point is when it’s difficult to find mentions of the company on X, YouTube, or discussion forums.
These situations can also present opportunities to exploit an inefficient market, as happened to me, for example, with Biorem Inc. In August 2021, before the market opened, the company announced it would buy back shares from its Chinese majority owner (approx. 60% of the total share capital and cancel them). When the stock market opened, the share price opened lower, and it took the first 20 minutes before the market reacted to the news.
Biorem has been my best individual investment so far over the past six years, and I’m still involved, of course. But it’s not some flashy/exciting company; revenue has seasonal variations, sales cycles are long, etc. However, I got in “cheaply,” the company’s business has slowly developed in the right direction, and the interest of widely followed investors on X, etc., has grown accordingly. The company’s market capitalization is now approximately 38M CAD, and at yesterday’s share price, it’s a 4.6-bagger for me.
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