VIDEO: Emerging Quality ASX Small Caps

Richard Hemming

Volatility and low interest rates present investment opportunities for subscribers and ASX share investors

The tremors on Wall Street as a result of the trade war rhetoric provide longer term ASX share investors with value. This is what happens when markets trade at high levels; you look for ASX stocks that have been left behind; that are considered boring, or just aren’t known about. These are the ASX stocks worth investing in.
 
Yes the stock markets around the world are high. But interest rates are also very low, which favours assets of all types. Yes growth is stalling. But the only way to get the kind of income and growth that you need for the long-term to live off is to invest in quality ASX stocks that aren't flavour of the month.

Why our Blue Chip Value ASX Stock Report calls banks a once in a life time opportunity

This week in Blue Chip Value our ASX Stock Report on the top 200 ASX stocks we cover CBA, which like the three other major Australian banks has had patchy performance over the past five years. The key is that this stock’s fundamentals are actually still strong. CBA’s earnings are cyclical, but it’s more defensive now than ever. Why is that? Because it has arguably the strongest balance sheet it’s ever had, thanks to regulatory pressure increasing the minimum amount of capital it can hold.
 
Fund managers might not like the ASX bank stocks right now, but their performance is measured every quarter. They can’t afford to look long-term. You can. These are classic value plays.
 

Under the Radar Report’s Small Cap Best Buys are going gangbusters

All the ASX small cap stocks on our Best Small Caps to Buy right now list have climbed more than 30% in the past couple of months. Name an ASX big cap stock that has had that happen to it.
 
We’ve delivered our stock report subscribers an average return of 70% on the ASX small cap stocks we’ve made best buys, which is 10 percentage points better than our average overall.

  • SomnoMed (SOM) – This ASX small cap is up 40% on evidence the turnaround is working and the US is growing again

  • Panoramic (PAN) another ASX small cap we recommended had climbed 30% when we said to take profits after a bid from Independence Group. The stock is still up, even though there have been complications following a production downgrade.

  • Medical Developments (MVP) another ASX small cap is up 40% partly on accessing the giant Chinese market, but really this is an ASX small cap stock that has a lot of growth ducks lined up, with approvals throughout the world and a product for which there is a clear clinical need. Imagine what it was like travelling in an ambulance without pain relief in the past.

 
We’ve got five best buys that are all ASX small caps that subscribers need to check out.
 

What is a quality Small Cap stock? What is Under the Radar looking for?

Speaking of quality, this is an area Under the Radar Report focuses on. 
 
Our independent analyst team spend much of our time looking for quality  ASX stocks. These are the sort of companies that can remain in a share portfolio for a long-time. You know what I’m talking about. If BHP halved in price tomorrow, you would want to buy more. This is a stock that is going to be around forever. What I’m talking about are the BHPs of the small cap world. The types of stocks that if they fall, you would want to buy more.
 
We have 10 quality criteria, which includes special mention from some of my favourite ASX small caps. On top of this we have what we call “emerging quality” – see our latest issue out tomorrow.
 
We’ve started on this road and we’ve going to talk more about quality in 2020. This will help investors really come to grips with investing for the long-term.
 
 

What’s coming up in our stock reports? ASX Stock Tips!

We have lots of ASX stock tips coming up and as a special Christmas treat, or New Year treat. Whatever you want to call it, we have our annual Fund Manager round table which meets to discuss the markets…
Australian Fund Managers in our Annual Round Table:
Participants include Geoff Wilson, Karl Seigling, Perpetual’s Jack Collopy, QVG’s Chris Prunty, Australian Ethical’s Andy Gracey, Andrew Brown and more.
Under the Radar Report also drills down and takes stock on Under the Radar’s research philosophy and how we pick ASX stocks.
To put it simply, we look for value, because over the long-term, that is the individual investor’s best friend.
Only when you look at the fundamental value of an asset you’re researching can you consistently make money.
We analyse the types of ASX stocks we encounter on our hunt for value;
And we look at the criteria we assess when we look at those stocks – their balance sheet; sales growth; profit margins and of course, management. But our main focus is always providing quality stock tips for our subscribers to grow their share portfolio.

About the Author

Richard Hemming

Richard Hemming (r.hemming@undertheradarreport.com.au) is an independent analyst who edits www.undertheradarreport.com.au, which provides investment opportunities in Small Caps that you won’t get anywhere else.

Under the Radar Report is licensed to give general financial advice only (AFSL: 409518). The author does not own shares in any of the stocks mentioned.

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