Minneapolis, Milwaukee, and Chicago…during the past two weeks I met with 15 analysts and investors in these three Midwestern cities. The purpose of these meetings was to learn what they are looking for in the way of micro-cap and small-cap stocks, and to market our clients who meet their parameters for investment. Thoughts about where the market was heading were all over the place, but not many were optimistic about another 30 or 40 percent rise. Sideways was probably the consensus.
Concurrent with my travels, the CEO of one of our client companies was meeting with buy-side investors in the same three cities. The reception for this company… which is a small-cap with a cloudy short-term outlook, strong balance sheet, solid management team, and solid long- term growth opportunities…was excellent. We already know that several of the investors he met with have become new holders of the stock, which rose more than 10 percent during the period while the rest of the market was down.
The moral of our Midwest investor musings…there’s been a dearth of non-deal road shows in strong micro-cap and small-cap markets such as Minneapolis, Milwaukee and Chicago. Yet, many, many fund managers have assets to deploy and they are looking for new ideas. If you can target investors that are actionable, that is, have a demonstrable interest in companies like yours and have the ability to buy your stock, get out and see them. They aren’t getting many calls.