🌟 Screening For Tiny Titans
Our Stock Screener
Welcome to the 2nd edition of this exclusive behind-the-scenes newsletter.
Today, you’ll learn about the criteria to find high-quality small-cap stocks.
Hello Friend 👋
I can’t highlight enough how amazing you are.
Last week, 23 Partners sent me a personal email with feedback.
This truly helps taking Tiny Titans to the next level.
For existing Partners, we are hosting an exclusive webinar going over every single stock within the Portfolio.
It will take place on the 24th of March.
Hopefully one of the companies in Our Portfolio will be the next Games Workshop.
I spotted it as an attractive company in 2015.
I still have the email I sent to a friend. The date says everything…
Since then, the stock is up over +5,000%.
But that’s not the reason I am sending you this email today.
I want to provide you with true value.
Here’s a question I received last week:
Let’s give you in an insight in how we look for Tiny Titans.
Tiny Titans Stock Screener
The watchlist of Tiny Titans consists of 93 companies with 10X potential.
Companies that could go from Tiny to Titan over time.
But how did we identify these stocks?
It all starts with a stock screener.
We look for companies with these characteristics:
Market cap < $3 billion
Net Debt / EBITDA < 3
No extra shares issued in the past 3 years
Net Profit Margin > 10%
ROIC > 15%
5-year average Revenue growth > 9% per year
5-year average EPS growth > 11% per year
If you used these criteria 20 years ago, you would have identified the following companies:
And today?
Here are a few companies that match the criteria:
Let’s highlight two companies from this list.
FitLife Brands ($FTLF)
FitLife Brands is an amazing small company.
The company makes money by acquiring and consolidating nutritional supplement brands.
Think about protein powders, vitamins, and electrolytes.
What makes the company remarkable? Its CEO Dayton Judd.
Dayton Judd is the Chairman and CEO. He still owns almost 60% (!) of the company.
He transformed the company from a struggling $3 million market cap company on the brink of bankruptcy into a 50-bagger in just 7 years.
This means an investment of $10.000 would be worth $500.000 today.
LeMaitre Vascular ($LMAT)
Another phenomenal company? LeMaitre Vascular.
The company makes money by selling medical products that help doctors treat blood vessel problems.
George Lemaitre, the chairman and CEO, still owns 8% of the company.
He has proven to be an amazing capital allocator.
The stock is up +1,600% since 2005.
Only the beginning
I am quite sure that Tiny Titans will have plenty of success stories like FitLife Brands and Lemaitre Vascular.
We are currently invested in 11 companies at Tiny Titans.
Over time, the Portfolio will consist of 33 high-quality small caps.
If only a few of them go up 10x during their life, results will already be very satisfactory.
Please note that I invest REAL money in these companies.
This way, our incentives are aligned.
As The Pointer Sisters sing: “I’m so excited! And I just can’t hide it.”
I hope you are ready when the doors open for cohort 2.
Today’s Action Item
Your feedback means the world to me.
Last week, it became clear that most of you are already invest in small caps:
Here’s today’s action item:
Here’s an email I received this week:
In case you have any feedback, you can email me any time via pieter@compoundingquality.net.
I guarantee you I’ll personally answer every single email.
Tiny Titans
Tiny Titans opened its doors on the 16th of September last year.
In less than 36 hours, all available spots sold out.
On the 9th of June at 2 PM ET, the doors will open again for Cohort 2.
You want to discover whether Tiny Titans is something for you?
Discover it here:
Small Companies. High Quality. Big Potential.
Pieter
P.S. Tiny Titans will launch on the 9th of June. Don’t forget to add it to your calendar here.
P.P.S. Already sure you’ll join? Leave your email here to get in 1 hour earlier than everyone else.