Research Style

The rigorous research process at MicrocapReport.com begins by screening stocks on a daily basis. We first search for key fundamentals: revenue and earnings growth. In addition to growth, we look for other important items like cash on hand, insider buying, and trading volume. Once those stocks have been culled together, they are placed into a quarterly portfolio and constantly monitored. Certain stocks within these portfolios are researched deeper by looking into the business model and picking out specific catalysts that could drive the stock higher. At times, phone conversations with management will take place to ‘kick the tires’ so to speak.

In addition to this proprietary screening process, special situations will also arise. For example, biotechs, which rarely have revenues (and therefore may not make the initial stock screen mentioned above), may show insider buying with plenty of cash and several upcoming news items that could make the current stock price look cheap. Another special situation example may be of a company where revenues are down, but profitability is up. In those situations the company may have exited a money-losing business, changing the profitability landscape. We feel incorporating special situations is important, but will do so on a case-by-case basis.

Subscribers can expect to receive email alerts in any of the possible formats:

1) Bullpen Reports – This will be the most frequent email subscribers will receive. After running the initial screen, stocks are culled together on a quarterly basis and tracked. Once a stock is added, an email will be issued of the stock(s) added with some editorial as to why it was added. Depending on further research and stock fluctuation, stocks in these portfolios may be written up as a ‘one pager’ or a full report. Also, stocks mentioned in prior reports can be updated here, especially if they continue to hit the screen quarter after quarter. An example is here: http://microcapreport.com/11-28-04.pdf

2) One Pagers - Some of the stocks that are added to the quarterly portfolios will then be researched more and could warrant a ‘one-pager’. The One Pager is a quick report discussing what the company does and what are the catalysts to possibly make the stock go higher. Here are some samples:

http://microcapreport.com/CULS012904.pdf

http://microcapreport.com/CAND033104.pdf

3) Full Report – A several page report covering items like: business description, industry overview/outlook, competition, management, catalysts, etc. For a sample full report, go to: http://www.microcapreport.com/FullReports/RITA1003.pdf