During his recent interview with the Business Brew, Ian Cassel explained how to find Rising Stars in small and micro-caps. Here’s an excerpt from the interview:
Cassel: The way I invest I kind of put things into two camps, you’re either going after Fallen Angels or Rising Stars.
I kind of put into two buckets, and those Fallen Angels, there’s companies that were the billion dollar market caps of yesteryear that are now down 70, 80 percent, you can definitely find opportunities in them. I’m just not… I’m kind of biased against those opportunities.
And I’m more geared towards trying to find the up-and-coming rising star, the new idea, and that could be a transformation from an old name, an old business, a new management team takes it over, or something like that, but I’m generally geared more towards finding new things.
It could be it’s… if there’s a management turnover, and especially if there’s some sort of potentially a rights offering or capital infusion from that new management team showing skin in the game as an inflection.
That’s kind of one of the screens that we do as well is we don’t necessarily screen for fundamentals from a screening standpoint but we do screen for rights offerings, insider purchases, anything that triggers skin in the game and a transition point in a business.
And that that kind of lets us sit up a little bit more in the chair and pay attention to what’s going on.
You can watch the entire discussion here:
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