top of page
Underwater diver in deep sea dive.jpg

MicroCap Deep Value

Invest in the smallest stocks out there - an area most funds aren't allowed

Strategy Description

Venture deep into the bottom of the stock market ocean and find tiny bargains waiting to be picked up. As retail traders, our only advantage over the large hedge funds and other institutional investors is our size. We can invest in stocks and strategies they can't, because they're too big. This can deliver great returns to those with the patience and stomach for short term volatility.

Our MicroCap portfolio invests 5% of the current account value into each new position with 20 positions always held open. This strategy uses no leverage. We seek to invest in high quality, profitable businesses that have a market capitalization less than $300 million and are also significantly undervalued according to our fair price model.

Strategy Objective

Benchmark: S&P 500 Index

To outperform the benchmark on a yearly basis and significantly so in the long term with a similar level of volatility and correlation.

Investable Universe

All stocks with a market capitalization less than $300 million dollars and at least $100,000 in average daily traded value.

Investment Approach

This strategy is part systematic/discretionary in our approach. We have strict criteria for position sizing, # of positions held and quantitative criteria to enter new positions. We use discretion with our qualitative analysis to determine the quality of a business and what investment to make out of a list of potential candidates.

We seek to invest in profitable, quality businesses that are significantly undervalued. We also look at the capability of management and how much they're invested in the stock. We typically hold positions until they return back to our calculated fair value level. We may replace positions early if the business deteriorates and/or we find a much better opportunity to add to the portfolio.

Position Sizing
  • We invest 5% of the current account value into each new position

  • We always carry 20 positions open

  • No leverage is used with this strategy

Trade Frequency

Positions are typically held open for several months to several years. Some months there may be no new trades, other months there may be several changes in the portfolio. Low turnover is a positive feature of this strategy that keeps trading costs to a minimum.

Key Benefits
  • Invest where most of Wall Street can't go

  • Hold positions in tiny stocks that have huge price appreciation potential

  • Some stocks pay generous levels of dividends for extra passive income

  • Achieve returns that differ from the typical mega-cap dominated indices

Strategy Performance

Below is the current performance of the MicroCap Deep Value strategy of a hypothetical $30,000 portfolio following this strategy versus the S&P 500 Index as shown on the chart. The real time performance is tracked by independent 3rd party platform, Collective2 (C2) which includes all brokerage and our subscription fees. All of our trades are entered in real time into the C2 platform and can be publicly verified by anybody.

Cost to Follow

The cost to follow the MicroCap Deep Value strategy is $60/month to receive all trade alerts to your email so you can manually enter the trades into your own trading account.

How to Follow the MicroCap Deep Value Strategy

The MicroCap Deep Value strategy is listed on Collective2, a copy trading platform that allows strategy developers to offer strategies for subscribers to follow and copy in real time. Think of Collective2 like an online trading strategy marketplace that anybody can join to find strategies to copy.

 

Follow the steps below to subscribe to the MicroCap Deep Value strategy.

1

Visit www.collective2.com and signup for a free account as an "Investor"

2

Visit the MicroCap Deep Value strategy page on Collective2 here https://collective2.com/details/142865493 and signup for $60/month

3

Collective2 will now email you all changes to our portfolio in real time and you will be able to see what positions we currently have open. All trades are sent in the last hour before market close. You can enter the trades into your account.

4

If you wish to have the trades automatically placed in your Interactive Brokers account then you have the option to sign up for an Auto-trade plan for an additional $49/month with Collective2 who will then automatically place all our trades in your IB account in real time.

After you sign up to our strategy on Collective2, you'll also be added to our members email list and immediately receive details on what current positions our portfolio holds. We also send out a monthly performance report to our members giving ongoing commentary on the markets and how our portfolio is performing so you'll always be aware of what is happening.

If you have any other questions you're welcome to email us at support@clickcapital.io

bottom of page