Only my 2c worth and of course everyone has their own ideas but my research focus is on just a handful of key indicators & if something ticks all the boxes I will go fairly hard at it, as early as possible.
The important thing I’ve learnt about research is to keep it simple and not to go into too much depth looking for evidence to support your thesis. She either ticks the boxes, or she doesn’t - I never go digging for more information that might help me rationalise a buy or sell. As long as she keeps ticking the boxes I’m unlikely to sell but the minute I see ticks missing I’m ready to exit - I’ve fallen in love with stocks in the past but they’ve broken my heart just about every time so I’ll never make that mistake again.
My simple criteria:
1. This is essential - it has to be a growth stock, preferably at the very early stages of growing revenues from a low/moderate base. This is easily researched via company presentations & then fact checking (because everyone spins their presentations) a few other sources. Costs need to be considered too, but strong growth trumps high costs & profit/earnings do not matter as much as revenues growth.
2. What is the company selling, and is it something disruptional or at least innovative? This is probably the trickiest item to verify or fact check. This relates to IP (I love to see patents) or some sort of “moat” that offers the company either an advantage or strong opportunity and this also relates very closely to number three:
3. What is the TAM? It needs to be in the billions, and I like to see a company (especially in the tech space) pushing into the US market and love to see the green shoots of pushing into a global market. Again, in company presentations but fact check the figures.
4. Management team & board: I look for people who have taken listed companies from micro cap to large cap in the past, and/or strong connections with those types of people (e.g. on the register or as part of a JV). This factor is possibly the single biggest indicator that the company will have a boom in share price at some point.
5. Recognise a red flag when you see one, because we are all going to get it wrong sometimes and we need to get the hell out when we realise we’ve blundered. For me it’s things like failing to deliver on stated objectives or constantly missing timelines, misleading wording or excessive spin on announcements, any failures in governance etc.
M7T ticks the boxes - I think the Achilles heel would be a competitive moat as they seem to have some competition or at least other players that are possibly perceived as offering a similar product but I really like the track record of management so that is a magnet for me.
M7T Price at posting:
$1.23 Sentiment: None Disclosure: Held
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