Q: Hi there. I was intrigued by the reply to a recent question which led to you providing a list of these six companies:
US: RSSS, BUKS, MCEM
Canada: HME, NCI, KUT
Can you please pick your 3 favourite regardless of country and provide a summary of why you think they hold potential as well as how each rank BOTH in terms of growth and risk with 1 being low risk/growth and 10 being high.
Thank you!
US: RSSS, BUKS, MCEM
Canada: HME, NCI, KUT
Can you please pick your 3 favourite regardless of country and provide a summary of why you think they hold potential as well as how each rank BOTH in terms of growth and risk with 1 being low risk/growth and 10 being high.
Thank you!
5i Research Answer:
These micro-cap names are largely under-followed and possess solid momentum. We like them all and would be comfortable holding a basket of these names. However, if we HAVE TO choose, here are our 3 favourite names, each with a different risk/reward profile.
NCI: accelerated growth, cheap valuation
RSSS: a high-growth SaaS business that we feel has been overlooked by the market
HME: double-digit growth in volume while offering attractive yields
Here is our ranking for each in terms of growth and risk profile
RSSS (8), BUKS (7), MCEM (7), HME (7), NCI (9). We excluded KUT for now, as the company is expecting to be acquired.