How To Implement A True Microcap Strategy That Works – Data Driven by Tim du Toit, Quant Investing In March 2016 Jim O’Shaughnessy (O’Shaughnessy Asset Management) published an interesting research paper called A True Microcap Strategy. The paper made a really convincing argument for investing in microcap companies (for exact returns continue reading), it is also the strategy they follow in their Micro Cap investment strategy. What is a microcap company? In the paper Jim defined a microcap companies as companies with a market value of between $50m and $200m. As a private investor microcaps are one of the few…
On This Page
- What is a microcap company?
- Why are microcap companies attractive?
- How many microcap companies are there?
- Companies in the screener with a market value of between $50m and $200m
- Just 5% of the market value of Microsoft
- Quality is very important
- Value and momentum work well with small companies
- Momentum and volatility
- Does it work?
- Buying the cheapest
- I am not sure of this S&P 500 return
- Buying those with the best momentum
- Combining value and momentum
- How to find these companies in the screener
- First select only microcap companies
- Next only include quality companies
- What the F-Score means?
- Find undervalued companies
- These combined ratios make it easier for you
- Value Composite One
- Value Composite Two
- Qi Value
- Find companies with good momentum and low volatility
- In summary - putting it all together – the final screen
- The last thing you have to do
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