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The Week in Small Caps


The Week in Small Caps

A Stock Market Spring?

Easter of course means we are well into spring, but it looks as though it may also mean that there are green shoots around for small caps, after what has effectively been a couple of painful years since the Q1 2021 mini-bubble. There is some decent evidence for this, one of the leading Twitterati, Myles McNulty has pointed out that there are bigger movers and volumes, and more opportunities as well. Just as important as the opportunities is that way that valuations have in many cases fallen to attractive levels, or been marked down to where investors are becoming interested.

On my side, I would say there is evidence of more interest in the market. The Bulletin Board Heroes charting video managed to double the usual listens on Wednesday, and on Thursday was triple the average. This may partly be that people like to listen to the sound of my voice, but I am guessing it is more to do with their enthusiasm for the stocks mentioned.

Tirupati Graphite

At the same time there seem to be quite a few companies who have reached an inflection point. This may be because of delays due to Covid / Ukraine, but whatever the explanation Q2 2023 seems to have a tailwind for some of the more high profile small cap names. For instance, this week, with RNS news on consecutive days, I interviewed Tirupati’s Executive Chairman, Shishir Poddar on a couple of occasions. It looks like the mantra of production, production, production, has finally got through, the shares were up 36% on the week.

Jersey Oil & Gas

A stock which was a sentiment booster, if nothing else, was Jersey Oil & Gas (JOG). It was also a stock where one could have bought the shares in the wake of the March 31 RNS – describing the company being in “talks”, and exited at the end of this week, up as much as 100%. How often has it been that straightforward in the world of small caps in the recent past?

Genflow / Saietta

Another stock where the only skill needed was the ability to read a RNS, was longevity play Genflow (GENF). Here the company’s announcement on Tuesday said that it has a two year cash runway, not something that many can boast of in the biotech space. The shares were up nearly 50% over the week. Saietta (SED) went even better, the stock up by two thirds as the EV focused engineering company revealed a £5m order. If this was the pre spring market  we are enjoying the stock may actually have fallen as investors decide it was an opportunity to grab some scarce liquidity.

Tap Global

A factor that may also help in coming days is the way that Thursday was the start of the new tax year, and there were certainly stocks like Tap Gliobal (TAP) where it was said by some that recent weakness was due to the vagaries of what tends to throw a spanner in the works in early April.

Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.



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