Issue 4: Small/Midcaps

This was a brand new experience- going through the smaller companies has shown me many differences from the large caps.  Whenever there is a business disruption, management dilution of shares through stock options, drop in earnings, etc.. it is almost always magnified larger by these companies.  The larger businesses seem much less open to large fluctuations these small caps possess, but there are many more opportunities here.  I have found some interesting companies and I really enjoyed going through these.  I plan on posting all 13 issues of my findings from the small/midcap VL’s, so expect to see one per week.

Great businesses in this Issue:

  • Omega Flex Inc
  • Birner Dental Management
  • Healthspring Inc

Also, some interesting situations were here as well:

  • American Oriental Bioengineering
  • NovaMed Inc
  • Kendle International Inc
  • LHC Group
  • Great Northern Iron- not for the price, but for the dividend…

The interesting situations are all now research projects of mine, except for Great Northern Iron.  They were just very interesting as a 12% dividend yield, but they pay out all their earnings, so that is what you would get every year, nothing more.

The same principles apply to the smaller companies, you just may have never heard of them, nor would you have a great shot at becoming personally familiar with management, employees, etc… (I’m a student in college, can’t go to California or Wyoming to visit these companies).

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About Andrew Schneck

I am a value investor focused on misunderstood securities and industries, with an eye for long-term stock ownership.
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