Uncovering value in the world of microcaps

Our next speaker is Joseph Constable from Hancock & Gore.

His presentation topic is Uncovering Value in the World of Micro-Caps.

H&G High Conviction Limited invests in a concentrated portfolio of ASX-listed micro-cap companies over a multi-year time frame.

The primary goals are to generate long-term double-digit per annum returns while minimizing capital loss.

Joseph is the portfolio manager and executive director of Henco & Gold since June 2020.

Prior to that, he worked at Supervise Investments Australia Limited, Smith & Williamson, and Hunter Hole International.

Welcome to the presentation, Joseph.

Thank you very much, Angelina.

Pleasure to be here.

So yeah, I really appreciate the opportunity to talk to you all today about something that's very close to my heart, which is the wonderful world of micro caps listed on the ASX.

So as I start, I'll display the disclaimers and this presentation is on ASX with our ticker is HCF.

So you can see all the relevant information there.

So what I want to start off with is saying that we are a listed investment company that focuses on investing in micro-cap companies listed on ASX.

And we have a very long-term track record of doing that.

And as you can see in this chart of outperforming

the general market validating our strategy.

And while we've been going since 2007, we actually listed as in a company in October last year.

So we've had just over a year as an ASX listed company.

And I want to put this into perspective of where we actually fit in the listed investment company landscape.

So as I say, we are a true investor in micro caps and we define that as sub $300 million of market cap

And our sweet spot is around the 50 million, 50 to 100 million market cap company.

So the reason why we decided to become a listed company is we wanted to give exposure to the wider public to this kind of strategy, which we believe is part of a diversified portfolio.

And we like that we can be investing in an uncrowded part of the market in this niche space.

And this slide here shows you that we fit into our very own spot being a concentrated micro cap investor

And we've been able to deliver positive returns.

So why HCF?

So I mentioned we are the only place you can go to on the ASX if you want a diversified micro cap portfolio.

And what that gives you is exposure to this uncrowded part of the market, which most institutions find it's too small for them.

They're not interested.

So we get the potential to find some very good deals and good long term companies we can invest in that are undiscovered.

And as I said, we've had a history of our performance.

And right now is a very exciting time because we believe micro caps are at cyclical lows, meaning they've been sold off quite a lot relative to the wider market and to large cap companies.

And this chart here just goes to show that opportunity that I just mentioned.

So over the years, our universe of companies, and in this case, these are all companies that have valued less than $200 million on the ASX,

and generate more than $5 million in revenue, this universe has been growing, and especially over the last year