The Tiny ASX ‘Extreme’ Punts that Could Hand You a Small Fortune

Small cap stocks

Welcome to your Extreme Small-Cap Profits email course!

Over the next 12 days, I’ll show you how you could profit from the pointy end of the Aussie stock market:

Of course, I’m talking about small-cap stocks.

Stocks you’ll be clued into as this short course unfolds could hand you gains like 500%, 600%, 1,000% or more.

As you’ll see over the next fortnight…

We’ve helped our readers collect gains just like those for over 13 years.

Today, we’ll just go over some basics.

I don’t want to overload you with too much information.

There is a specific strategy that could maximise your potential small-cap profits. And I’ll step you through this strategy over the next 12 days.

But before we dive right into the ins and outs of speculating profitably on small-cap stocks, let me introduce myself.

My name is Härje Ronngard — pronounced like the French Perrier water. Ah…the joys of having a Swedish name…

I’ve worked as an analyst here at Port Phillip Publishing for more than two and a half years.

I’ve had the fortune to work and collaborate with almost every editor here.

I’ve seen firsthand a range of money-making strategies, from income investing to computer-driven algorithmic trading.

And I can say right now — without doubt — the best way to increase your net wealth FAST is by speculating on tiny, lightning-quick breakthrough stocks.

I’ve uncovered small-cap punts that have rocketed up 300%, 500% and even more than 1,000%.

If your mouth waters when you see figures like that…hold onto your hat.

Over the next fortnight, I’ve reveal how YOU could potentially collect gains like those for yourself.

Before I joined Port Phillip Publishing, I was a day trader working for a high-profile institutional trading firm. I was part of a tight-knit group who specialised in pinpointing stocks on the verge of huge upwards trends…months in advance.

The directors who ran the show charged me with making million dollar trades on a daily basis.

It was an exciting and high-pressure role. Let me tell you…NOTHING gets your heart pumping faster than plonking a million bucks on a single trade order!

I guess you could say I’ve spent my whole professional life hunting down extreme profit plays. The kind of stocks that could multiply your money five, six or 10-times over in a matter of weeks and months.

And now I want to share my knowledge with you.

If you’ve read Money Morning from day one, you know we like to write about contrarian ideas and rebel against the powers that be.

It’s because of you — the reader — that we continue to write about ideas and news that could potentially make you a lot richer tomorrow.

So again, thank you for reading.

Now, let’s jump into the first day of your 12-day Extreme Small-Cap Profits email course.

Small-caps 101

Before you can start to find small-cap gems hidden on the ASX, you first need to find gems in the market, and we need to know what small-caps are.

So let’s cover some basics.

Like the name suggests, small-cap stocks are small stocks. And it’s because of their size that they have the potential to grow rapidly.

‘Small’ can be defined in many ways.

Most investors believe small-caps reside in a market cap (share price multiplied by total number of shares) of around $500 million to $1 billion.

Others might define ‘small-cap’ as $100 to $500 million. 

These technicalities don’t matter that much.

To me, small-cap stocks are small stocks with the potential to explode in a matter of months. Generally, these stocks tend to be under $1 billion in size.

Small-caps in their natural habitat

OK, easy enough. Small-caps are small stocks.

Now let’s check out what a typical small-cap looks like.

Let’s look at lithium miner, AVZ Minerals Ltd [ASX:AVZ] and software company, Elmo Software Ltd [ASX:ELO].

Both are comfortably below the billion dollar market cap range.

AVZ has a market cap of $585 million, and Elmo Software has a market cap of $291 million.

Both also have the potential to rocket up within months.

Early in 2018, AVZ and Elmo got out to a running start. AVZ climbed as high as 58% and Elmo was up as much as 35% at one point.

ASX:ELO Chart 13-04-2018 Source: Google Finance
[Click to enlarge]

Last year, the return of our Aussie market (the All Ordinaries) was a little over 6%.

That means you could have beaten the market’s 2017 returns already by buying AVZ or Elmo.

Strike it rich backing a single stock

It’s safe to say, small-caps are an incredibly lucrative space to be in. AVZ and Elmo are just two examples of thousands.

Meaning there are plenty of opportunities to double, triple and even quadruple your money, while the market plods along at a boring single digit return.

When I was working with Sam on Australian Small-Cap Investigator, we had a stock in our buy list called Clean TeQ Holdings Ltd [ASX:CLQ].

The company had fingers in multiple pies. They were exploring for cobalt, nickel and scandium. They also had a water purification system that was gaining traction in Asia.

From June 2014 to March 2017, the stock rose from 4 cents to $1.04.

That’s a 2,500% return in less than three years.

It was a great investment for Australian Small-Cap Investigator subscribers, who netted a return of more than 1,300%.

Yes, that’s right, subscribers made 13-times their money.

Those who invested $10,000 turned it into $130,000. Anyone who invested $100,000 would have turned it into $1.3 million!

It’s these kinds of returns we’re looking for as small-cap investors.

Of course, there are risks involved.

Such small companies have limited histories. Because of that, it’s difficult to predict future growth.

Their small size also puts them at risk of extreme price swings throughout the year.

As you might already know, it’s far easier for a small-cap stock to decline 10% than it is for a business worth $100 billion to decline 10%.

I’ll explain more about risks associated with small-cap investing as we go on through your course.

But for now, just be aware there is no such thing as a free lunch. Even when investing in highly lucrative small-caps.

 

Härje Ronngard,
Editor, Money Morning

Harje Ronngard

Harje Ronngard

With an academic background in finance and investments, Harje knows how simple, yet difficult investing can be. He has worked with a range of assets classes, from futures to equities. But he’s found his niche in equity valuation.

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