I do a huge amount of number crunching and research into small-cap equities to uncover pricing anomalies and identify likely share price catalysts to correct the under valuations.
The doubling of the share price of Israeli-based technology group MTI Wireless Edge (MWE) since I initiated coverage and the 450 per cent share price appreciation of finance company ThinkSmart (MWE) in only 10 months highlight how extreme the mispricing can be, not to mention the magnitude of the profits that can be realised. Both holdings still offer decent investment upside.
The same is true of royalty finance company Duke Royalty (DUKE), a constituent of my 2021 Bargain Shares Portfolio, which offers potential for Covid-19 asset write-downs to reverse as the global economic recovery boosts royalty revenue and royalty partners' valuations. Duke's management is also proving adept at recycling cash from disposals into high yielding investments. Earnings upgrades beckon, one reason why the shares are starting to re-rate.