Flying under the radar: 87 tiny companies
I'm looking for investment candidates among these tiddlers.
What better way to spend a Friday than painstakingly trawling through hundreds of company websites, looking for promising management teams?
That’s what I did today.
I looked at every UK-listed company with a market cap of less than £10m (ok, there were some exceptions).
When I found the director biographies, I looked for three things:
Founders on the Board, preferably running the company as CEO.
Directors who’ve been with the company for a very long time: they might not be good at growing it, but they are probably very good at not destroying it.
Any evidence that it’s a family business.
What I’m left with is a list of 87 companies where the founders are still running it, the directors have managed to stick around for decades, or it’s a family business.
I already know that I would never invest in some of them: either because of the sector, or the individuals running it, or because I’ve studied them and discarded them before.
But you may have a different view - you might like the ones I don’t, and vice versa!
Either way, I think this is a useful spreadsheet.
Over time, I’d like to expand it - in term of both the number of stocks covered, and the detail on each stock (for example, I haven’t yet included the percentage ownership of every founder - that is something I will look to add over time).
What I left out - I did not include investment trusts, SPACs, venture capital trusts or companies whose main goal was to make an acquisition.
What I included - I included pretty much every other sector!
What I discovered - I found lots of companies I had never looked at before, but which were being faithfully run by their founders. Frequently, these founders still had significant percentage stakes. I even found a small number of family businesses that I had never studied before.
With market caps below £10m, these companies are below the radar of large institutions, and are only of interest to a few eccentric investors such as you and I.
I can now start the next phase of research: studying them in more detail, looking for growth prospects, and also moving on to slightly bigger companies (up to £20m market cap).
Would you like to view this spreadsheet?
I’ve decided to limit this to subscribers only, as the work involved was laborious.
But it was definitely very rewarding, and I do intend to keep going. If I turn over hundreds (even thousands?) of these rocks, I’m bound to find a few interesting things!
Because the next time I invest in a tiny company, in the hope that it’s a future monopoly (or at least a high-quality value play), I want management to be on my side.
I want them to be deeply committed to their mission.
And nothing expresses that more to me than a founder with a meaningful stake.