At Radar we do hours of fundamental analysis, looking at a company's financial structure; its management; its forecast earnings growth; and some X factors. The last factor doesn't refer to a television show, but is a crucial one in our annual average return of 20% plus a year.
In our article under Making Money: Investment Philosophy we make it clear that before getting our hands really dirty on the analysis side we look at the sector the company is in. What Radar is essentially looking for is this: A company that is able to fund its business and its growth; but also has the potential to outperform everyone's expectations.
eServGlobal is a classic example. The stock has tripled and we still like it, AND its growth business HomeSend isn't even profitable. Clover is making money but has a biotech element that could put a rocket under its share price. This is what you want from small caps: big potential at very low prices. We have one coming up for you this week.