In looking for the ‘next big thing’,
SmallCapPower spoke with AlphaNorth Asset Management President and Chief
Investment Officer Steven Palmer as well as Research Analyst Tina
Byers, who returned recently from the second AlphaNorth Capital Conference, which was held this year in the Bahamas.
The conference connected 39 small cap companies in the technology, biotech, healthcare and special situations spaces with some of the top institutions and specialist brokers in North America through a full-day series of one-on-one meetings between issuers and those involved in finance. Ms. Byers described the conference as being twice as big as last year and the investor sentiment was positive overall.
Mr. Palmer said while there wasn’t one company in particular that stood out, there were a handful, in his opinion, that could become significant winners, and by significant he meant increasing in value by “10 times.” Included in this list are companies such as AnalytixInsight Inc. (TSXV: ALY), Las Vegas From Home.com Entertainment Inc. (TSXV: LVH), LeoNovus Inc. (TSXV: LTV), Eguana Technologies Inc. (TSXV: EGT), and DataWind Inc. (TSX: DW).
When asked about his outlook for the Canadian Venture market in 2015, Mr. Palmer replied that he has no sector biases as all sectors are depressed right now, even junior techs and biotechs have been out of favour. His company, AlphaNorth Asset Management, focuses on stocks with market capitalizations of less than $100 million and he believes there is potential for all sectors there to do well.
In regards to commodities in 2015, Mr. Palmer said gold looks like it may be the first to break out and that he found it interesting that gold is going up along with the U.S. dollar – normally the opposite is true. He thinks, though, the U.S dollar’s run is unsustainable and when it reverses it could provide a further catalyst for gold to move higher. Mr. Palmer also believes the oil price is unsustainable where it is currently and there will be a rebound.
During past interviews with Small Cap Power, Mr. Palmer mentioned companies he liked that included Vogogo Inc. (TSXV: VGO), Spectra7 Microsystems Inc. (TSXV: SEV), and BSM Technologies Inc. (TSXV: GPS). He still likes these names and holds shares in these companies. Each one, he added, has very different risk profiles. Vogogo, for example, is difficult to put a valuation on seeing that it doesn’t have a lot of revenue right now but it’s early days in its sector and the stock could have “huge returns two years out.” A company like BSM Technologies, on the other hand, is easier to value since it has an earnings history. Mr. Palmer believes BSM doesn’t have as much of an upside, but it is a lower risk investment.
Disclosure: AnalytixInsight Inc. is a client company of SmallCapPower and Ubika Research and has paid a fee for coverage.
