Here are the highlights from this year’s Microcap Conference.
The Microcap Conference took place on April 11 and April 12 in Toronto, Ontario. The event was an exclusive opportunity for investors specializing in small stocks to speak with the management of some of the most exciting small companies on the market today. The event also hosted various expert panels, covering everything from general investing insight, how to choose the strongest micro cap companies and the specifics of today’s tech market.
The Investing News Network was on the ground, connecting with management, buyside analysts, and micro cap investors. Here’s what we learned from the event.
One of the most valuable aspects of the conference was the advice and commentary doled out by investing experts like Stephen Foerster of Ivey Business School, Sen Peasgood of Sophic Capital, and David Waters of Alluvial Capital and OTC Adventures. So, what are the most important things for investors to be aware of when considering the small cap tech market? There are three main factors to be aware of:
- Strong Management Team
- Strong Media Traction
- Innovative and disruptive technology
For Sean Peasgood, a strong management team is one of the most important assets for a small cap company. According to Peasgood, “management makes everything happen.” Speaking from his own experience, “we do a lot of due diligence on management.” In short, he’s looking for a team that can “take [a] vision and execute it.” However, management alone doesn’t make a tech stock succeed.
That’s where news outlets come in. Over lunch, a presentation from SmallCap Discoveries emphasized the importance of having a media trigger to increase a company’s profile. There are many strong small cap companies on the market today, but it’s only once investors start talking about a particular stock that we see share prices rise. Therefore, a clear, simple, persuasive story is important for an early-stage tech stock. Companies like Datawind (TSXV:DW) appear to have this locked down. During the company presentation, CEO Suneet Singh Tuli made a compelling case for his vision of cheap mobile data in emerging markets.
Indeed, this points towards the third and final takeaway from the conference’s expert panels and presentations. At the end of the day, every expert echoed the need for a strong product at the core of a company. Although a strong management team and a good media story are important components of a successful small cap company, these are ultimately meaningless if the company isn’t developing and marketing an innovative and disruptive technology.
Companies to watch
Another core element of the conference were company presentations. All told, almost 40 small cap public companies presented during the two day event, representing some of the most exciting microcap opportunities on the market today.
As previously mentioned, DataWind offered up a compelling presentation, touching upon many of the same points covered in this interview. Meanwhile, Apivio Systems (TSXV:APV), which increased its profile this year by ranking on the 2016 TSX Venture 50 List, also presentation. Symbility (TSVX:SY), BioSyent ITSXV:RX) and Avante Logixx (TSXV:XX) also offered up intriguing company presentations.
It’s important to note that the companies presenting at this conference didn’t exclusively fit into the tech sector. For instance, Medicure (TSXV:MPH) was a key representative of the pharmaceutical sector, while companies like Biotricity (OTCBB:BTCY) and LED Medical (TSXV:LMD) bridged the gap between tech and healthcare by offering up medical device solutions.
Overall, the key takeaway from these company specific presentations is the malleability of the future tech market. Almost every company on the program gestured towards the fact that their products transcend specific niches: incorporating data, the mobile web, fintech and cyber, these technologies can’t be constrained to one use or market. Therefore, interconnectivity might be the best word to describe the future of the tech market. More and more, the tech ecosystem is becoming deeply interconnected. Companies who want to compete in the space need to forge strategic partnerships within the tech community.
All in all, this year’s MicroCap Conference was a wonderful event. Stay tuned for future articles which draw from the expert information and insight gleaned during this event.
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Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.