Average of high-point return for all of Investorfile’s 27 Top Ideas to date is 384%.

While 2022 was a difficult year to produce positive investment results as a small and microcap stock picker for non-resource sectors, 2023 actually ranked as the worst year of all, since the Investorfile blog commenced publication of its very first small cap value stock pick back in December of 2011.

While we feel our stock picking methodology remains sound, given the financial stability for the majority of our Top Ideas, unfortunately, very low valuations and little liquidity were the dominant trends again for small and microcap stocks in 2023, thus leading to the significant stock price erosion year over year.

As mentioned before, we are bottom-up small cap stock pickers’ blog, therefore Investorfile is not about to predict the direction of the market for the upcoming year (we are of the view that no one can predict the market’s direction consistently anyway). That said, Investorfile is of the belief that the ultra-low valuations for small and micro-cap stocks have bottomed. The question is, how quick will the recovery be in 2024 to get back to more normalized valuations?

Despite the negative market sentiment for small cap stocks, two of Investorfile’s Top Ideas still set new high-point return marks in 2023: AirIQ (TSXV: IQ) and iFabric (TSX:IFA).

Investorfile has documented 27 picks that, to date, comprise our list of Top Ideas – Small Cap Value stocks. This summarizes the performances of our Top Ideas since inception. Note that high-point returns are based on the highest closing stock price and exclude investment return benefits from dividends, with the exception of final return calculations due to takeovers. Dividends and return of capital distributions are deducted from share price cost-base for the calculation of final returns.

Average high-point returns based on highest closing stock price equals 384%
To date, 11 takeovers/privatizations at a premium-to-stock price
Paid out a combined total of $3.25 per share of dividends/return of capital.

The list of Top Ideas which had positive investment returns year-over-year in 2023:

Destiny Media Technologies (TSXV: DSY) +123%
Gatekeeper Systems (TSXV: GSI) +104%
AirIQ (TSXV: IQ) +60%
Noble Iron (TSXV: NIR.H) +60%
iFabric (TSX: IFA) +44%

All-time top 5 rankings of Top Ideas for high-point returns as December 31, 2023:

Sangoma Technologies Corp., TSX: STC, +2377%
Questor Technology Inc., TSXV: QST, +1374%
Gatekeeper Systems Inc. TSXV: GSI, +783%
Quorum Information Technologies Inc., TSXV: QIS, +725%
RDM Corporation, Takeover, +708% (includes dividends)

Author's ownership disclosure: YES: STC, QIS, QST, GSI, NIR.H, IFA, DSY, IQ

Read Disclaimer:

This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness. The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

Investorfile is not engaged in an investor relations agreement with Questor Technology Inc., Sangoma Technologies Corp., Quorum Information Technologies Inc., Gatekeeper Systems Inc., Noble Iron Inc., iFabric Corp., Destiny Media Technologies Inc. and AirIQ Inc. nor has it received any compensation from Questor Technology Inc., Sangoma Technologies Corp., Quorum Information Technologies Inc., Gatekeeper Systems Inc., Noble Iron Inc., iFabric Corp., Destiny Media Technologies Inc. and AirIQ Inc. for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Questor Technology Inc., Sangoma Technologies Corp., Quorum Information Technologies Inc., Gatekeeper Systems Inc., Noble Iron Inc., iFabric Corp., Destiny Media Technologies Inc. and AirIQ Inc. through open market transactions and for investment purposes only.