Hey all, this month I added quite a few newer stocks and a lot of them on the smaller side. I introduced a new concept on my channel of “Microcap Ventures” which are microcap companies I see having a lot of potential. The main difference is I’m not planning to do much earnings preparation before they report, but I’m using the same research process for all my companies. Just as a heads up, some of them are low volume and can have wide bid/ask spreads so please take that into account.
Results ending on September 30,
2024: +146%
2025: +136% YTD
Cumulative: +481%
Allocations,
Iren IREN 17.6%
AppLovin APP 17.4%
Astera Labs ALAB 16.8%
Electrovaya EVLA 10.9%
Hive Digital Technologies HIVE 7.8%
BioHarvest Sciences BHST 6.8%
Health in Tech HIT 6.3%
Applied Optoelectronics AAOI 4.1%
Reddit RDDT 3%
Dave Inc DAVE 2.9%
Microcap Ventures
Organigram OGI 3.1%
CPS Technologies CPSH 1.9%
Duos Technologies DUOT 1%
Zoomd Technologies ZOMD.V 0.5%
Promising new names for the month were,
NextVision Stabilized Systems NXSN.TA - micro-stabilized cameras in drones
Thank you for this. You have great ideas. As for ELVA, I did my own valuation on it and using future revenue, future price sales ratio, and future dilution, determined that you can earn a 15% CAGR over the next 2.25 years if you buy it between 5.90 and 11.80. To do an accurate valuation, the best you can hope for is a wide range IMHO.
This is a company from way back in the it’s going to make us all rich cycle…oh wait… I had this on my radar back when I had Tilray, IIPR, etc as smaller holdings. None of them lasted and I probably lost money on those.
I went to their investor presentation for a quick recap and it doesn’t look great to me. Yeah, revenue seems to be up 73% (but only 7% qtrly) and then you look at cost of sales and taxes also up in the 70%'s. So they can make more money but they don’t get to keep anymore, their costs ‘appear’ to be scaling with sales. Not a good sign.
They do seem to have good gross margin, maybe too good? 87%?!?! Then they list a couple of variants of gross margin that confuse me.
With this info, I’m staying on the sidelines for a bit longer.
Crikey Wrl! Cracking good show! I’ved been riding in your jet stream for a good bit of this, and am very grateful that you have so generously articulated your strategy to learn and benefit from. However, putting yourself out there exposes yourself to those that have a different point of view, so I hope that isn’t wearing thin. With that in mind, I don’t share your enthusiasm for BHST. I do have a position, but I’m lacking in conviction for a few reasons. Some of the reasons are personal bias, so I’ll skip those! However, quarterly revenue grew at a > 40% clip last quarter, which is very good, but the growth rate seems to have been decelerating for quite a few quarters now, and while EBIDTA margin is improving, it’s still firmly in negative territory:
Q1-24—> Q2-24–>Q3–24–>q4-24–>Q1-25–>Q2-25
5.3m 6.0M 6.5M 7.3M 7.9M 8.5M Revenue
147% 119% 101% 61% 47% 41% Yoy Growth Rate
-2.1M -1.4M -1.8M -1.6M -1.3M -1.4M EBIDTA
-23% -24% -27% -22% -17% -17% EBIDTA Margin
You’ve described the growth drivers and initiatives that could/should propel the metrics into positive territory, but all the hyperbole in presentations (“change the world, etc.") makes me cautious about getting too caught up in the hopium.
On a personal note, I’ve been a green tea drinker for decades, so I immediately purchased some Vinia green tea from Amazon. The packaging is high quality and impressive. But the acid test, at least for me, is brewing up a bag of tea. It tasted fine and did not make me jittery at all, which is very good. I went for a swim within an hour of drinking a cup, and noticed what seemed to be enhanced oxygen uptake (didn’t need to breathe as hard), probably due to the Resveratrol. I slept fine that night, which was welcome. But the thing is, I felt poorly most of the next day, and as a result haven’t been eager to brew another cup. Science has shown Resveratrol to be beneficial, so of course the assumption is that “more is better” and thus taking it in super high potencies should be just what the doctor ordered. But it didn’t work that way for me. I realize that this is n=1, so not a useful indicator of how a larger population might respond.
This industry definitely had a massive hype cycle which collapsed, and a lot of investors have written it off completely. I see that as more of an opportunity, because the expectations are now so incredibly low that a company outperforming here should drive significant results. The regulatory environment is more friendly than when they IPO’d, and there has been a ton of consolidation and washouts within the industry.
A lot of the growth for Organigram is coming from their acquisition, but it doesn’t seem like they paid very much to acquire a new revenue base along with a lot of synergies. My take is that the next quarter should be strong, but this is likely a company that will be evaluated on a quarter by quarter basis more so than other investments.
Interesting, I’m showing gross margin as 37% in the latest quarter. What can make their financials a bit tricky is they report in CAD but many data providers auto convert to USD. Additionally, they report a gross revenue and net revenue number, some subtlety there which may be why the different metrics. I looked a bit into the differences on these metrics and felt comfortable enough to invest here.
Fair points here, and we’d typically like to see the revenue yoy growth rate going up. I’m okay with how it looks there as each quarter is growing sequentially still. The company is scaling up, so the story checks out for me why they have not hit profitability yet. They did say they expect to get to adj EBITDA profitability later this year, so I would like to see them deliver there.
Hyperbole is a good way to describe it properly, but I do think the management team believes what they are saying. It’s my understanding the scientific breakthrough they speak of is that they can synthesize plant exomes meaning they can reproduce the beneficial parts of the plants in a lab. Resveratrol is one of the first applications, but this is just one of many they will be producing from what I gather. They were talking about one rare plant in nature, and said this:
”Our target compound on this project is a provocative use case for our botanical synthesis technology as the compound is a highly valuable compound derived from an endangered plant species that sells for thousands of dollars per kilo.”
From what I gather here there’s an endangered plant species that has some benefits for health but it costs thousands of dollars per kilo. Since they’ve sequenced the exome they can now produce a synthetic that is vastly less expensive.
I saw some reviews of the tea on Amazon that the string to the bags may come loose. There may be some issues like this to work out as they have the chews and pills as well. It’s still just 20% of their business on this direct to consumer side.
I do find anecdotal evidence to be useful even it’s a n=1 sample size as you say. Ultimately since you are controlling the decisions in your portfolio it’s good to build up confidence with first hand knowledge of the product if that’s possible. If the tea doesn’t check out in terms of the quality you had envisioned, it does make sense not be overly enthusiastic here.
HIVE and IREN do have a somewhat similar story. They are both veterans of the Bitcoin mining space where companies had to hyper optimize around data center usage and electricity just to survive. HIVE has done a really smart job diversifying across three geographies which are: Canada, Sweden, and Paraguay.
The way I think about evaluating a business like this is a bit different than some of the other companies followed by the board. I believe these three additional factors are important to look at for any Bitcoin mining business (in addition to revenue and profitability growth),
Bitcoin on balance sheet - acts similar to cash, but some small custodial risk
MW of power available
Exahash of mining capacity
HIVE shows up extremely well across these metrics. They have $50M Bitcoin, 430 MW, and approaching 25 exahash by Thanksgiving.
IREN and CleanSpark both have 50 exahash of mining capacity so double what HIVE has. The difference is IREN is a ~15B company, CLSK is 5B, and HIVE is 1B.
HIVE has apparently been in the HPC game for some time as well going back to A100s, so I believe they have the proper experience to get up and running smoothly without a lot of debt and dilution.
Well done these last two years. Its amazing the performance you have achieved.
I’m curious about your recent expansion into microcap companies, including those not listed on U.S. exchanges. It seems like that requires an additional set of skills and energy compared to your already successful, more focused niche. As your portfolio grows after these stellar performance years, investing in smaller companies can become more challenging microcaps, especially unlisted ones, which can have their prices move significantly with relatively little capital.
How do you see the trade-off between expanding your focus and the limits imposed by market size? In other words, how do you balance the extra time and effort required to research these smaller companies against the declining scalability of returns as you deploy larger amounts of capital?
Something I admire about you is how decisively you manage your positions, how quick you build up a position. It’s a little off topic here but I would be interested in you explaining your position balancing, to include trimming or profit taking. I’m a subscriber to your Youtube channel, so if you feel a video would do it better justice, I’d be very interested in watching that.
Once again, well done, you’re an inspiration and a help to thousands of people with your posts, from those who post to those who simply read and watch your videos.
@wpr101 Have you researched MARA? Some folks think it could be the next bitcoin to hpc data center stock to rip higher. I just read a couple of articles about it and took a 1% speculative position.
@drew1618t Thank you for all of that incredible feedback! I’m a big believer in what Saul said about this style of investing being a non-zero sum game, or rephrased as a positive sum game. Great questions there on the focus and trade-offs of having a longer tail of smaller companies in the portfolio.
A few years ago, I would not consider companies that were below a 2B market cap as I felt the sweet spot for this style of investing was really around 5-20B, as these companies scale up to the 100B range or so. This also coincidentally may have been because a lot of SaaS companies would go public from a 2B - 10B range, and it was quite rare to see any quality SaaS name go public below 2B. It was around 2023 that I started adjusting to look for companies with lower market caps, going as low as 500M. I found that there were quite a few interesting names in that 500M - 2B range.
More recently, I’ve basically lowered the threshold to be a market cap of 50M and above. I notice there are a lot of completely neglected companies in this range and a lot more anomalies in pricing. There are are lots of institutional level screeners that simply won’t invest in these low market cap / low volume types of companies. However, a smaller company like this over performing on earnings will have it’s price and volume rise, in turn attracting institutional money.
To give one concrete example, the IBD 50 list has a minimum price per share, and volume requirement to enter the list. It seems like currently this threshold is $20 for NYSE stocks and $16 for Nasdaq stocks. According to AI the volume requirement is 200k shares, but the overall formula IBD has is private. What happens is that let’s say a stock like HIVE which is at $6 goes on a big run up. Once it hits $16, it then enters the IBD 50 as a completely new stock and then has a enormous run up just from entering the list. There’s a lot of momentum traders using this list as their primary source for trades and a lot of them end up piling into the name. As an individual investor this gives us a big advantage to be able to get into names before they appear on the IBD 50 or similar lists.
On the time aspect of the question, for some of these “Microcap Ventures” as I coined them, I’m mostly trying to find out if I believe the company will be over-performing on their next report. This is a combination of checking financials, carefully reviewing the earnings transcript, seeing what analysts and the market expects, and seeing where the value of the company is currently. For example, with Zoomd Technologies ZOMD.V my strategy is to hold till the next earnings and see where they land. I’ll re-evaluate at that next earnings report and see if I want to stay in or not. The opportunity seems compelling to me there with a SaaS company that has ~20M revenue +40% yoy, ~5M net income, and a 200M market cap.
Overall it’s not that much additional time commitment for owning this company. Although something to keep in mind is now that I am doing stock investing full time, I do have more hours to dedicate. In the past I would have likely seen a company like this and thought they would do well, but it wasn’t worth the loss of focus on bigger names.
I hear from a lot of investors they wish they could get into companies earlier, or they wish that smaller companies IPO’d more. However, so many opportunities in the market already exist for these small growing companies that are just overlooked by 90%+ of market participants. I’m just seeing tons of compelling opportunities on this smaller side where the risk/reward is attractive.
On the volume side of question, that does require a bit more tactical strategies there. I’m not going to submit a large market order all at once to a tiny volume stock. I’ll likely test the waters with a smaller market buy or limit order and build up a position. The real risk here is on the downside and getting out after bad news. Although the bad news itself is likely to create volume. I will add there’s a much bigger chance that some of these smaller names blow up with bigger losses than we usually see. On the other side, it’s a lot easier to get those 500% or 1000% returns from a smaller overlooked business than with a large cap.
@FoolishJeff I’m actually quite surprised to see MARA getting into the HPC market. I checked out their latest conference call, and they seemed to be speaking down about miners that were transitioning to HPC. Here’s a few things Fred Thiel the CEO said on their latest conference,
“For one thing is not many of them (Bitcoin to HPC) have been able to secure contracts with hyperscalers and some of them have moved towards essentially trying to go out and get customers”
“We personally think that, that business is (Bitcoin to HPC), over time, going to be very price competitive and margins are going to compress in most cases”
“It’s going to be hard for them to acquire customers”
“Many enterprise customers want to work with people who have hosted enterprise customers before and understand how to run those types of data centers and most Bitcoin miners don’t”
“So you still haven’t seen really any large number of these companies transition successfully to HPC outside of a handful”
“We remain very focused on being a Bitcoin miner, but we’re also very focused on looking at where you have the convergence of inference AI and the needs of enterprises, especially around sovereign data”
I highlighted parts of that last quote because it sounds like they are planning to stay as a Bitcoin miner primarily, will exploring some options around sovereign data. Those quotes combined doesn’t really sound like they looking to move into HPC, but I do wonder what they are talking about there regarding sovereign data.
Something to keep in mind with MARA is they hold about ~6B worth of Bitcoin, but they also have about 2.6B worth of debt. The net of this is maybe around ~3.5B of cash equivalent with the Bitcoin. It does make me a bit nervous to see a company hoarding this much Bitcoin without selling it back. It’s much more a directional bet on the underlying asset than you get with IREN which sells at it’s Bitcoin back, or HIVE with a smaller balance of Bitcoin. What this ends up doing to this stock is that it trades in tandem with Bitcoin. I’m not sure MARA can outperform IBIT (Blackrock’s Bitcoin ETF) by that much. There’s also added custodial risk to holding that many coins. One rogue employee mismanaging the private keys for the Bitcoin, or the custodian losing the coins can potentially tank the business unexpectedly.
This relates to a point I brought up in the ‘NeoCloud not so easy’ thread. Does Thiel really think that the Bitcoin-to-HPC companies have as their end-goal renting out AI compute to the hyperscalers? Are these companies transitioning to being HPC providers because the bitcoin mining business has little economic future?
That actually might make sense, as the more bitcoins are mined, the more expensive it is to mine another bitcoin. That’s literally built into the bitcoin mechanism. So by its very nature, the economics of bitcoin mining get worse every day. And that leads to a topic all its own as to what happens when no-one wants to mine bitcoin anymore (or all the bitcoins are mined)? Without mining, there is not Proof-of-Work consensus. If there aren’t miners to validate new copies of the ledger, the blockchain would fall under attack, rendering bitcoin as a store of value useless. But, that’s a topic for another thread, probably another board.
If the NeoClouds continue their path as compute suppliers to the hyperscalers and the bitcoin miners shift to that as well, how do the hyper scalers not win in the end? The Neo-Clouds are forcing themselves to focus on supporting their 800-lb gorilla customers (hyperscalers) instead of focusing on AI service infrastructure, while the bitcoin to HPC companies have nothing else to do, at least profitably.
Hi William - sorry, a bit late getting around to this but how is your thinking on the comparison between Dave and Bravura? Do you contrast them at all or just as independent investment opportunities or do you feel that US vs Ex US is sufficient differentiation in their fields of play?
A website named “BioTechHealthX” @BioTechHealthX released a favorable story on Bioharvest on October 7th, which seems to have stimulated some buying interest in $BHST shares: BioHarvest Sciences (BHST) Grows Revenue 58% • BioTech Health X There doesn’t seem to be anything new in the story, and I’ve never heard of BioTechHealthX before. I asked AI to give an assessment of BioTechHealthX and received this summary: While BiotechHealth X may produce thoughtful coverage for its niche audience, it is not considered a leading, mainstream, or universally reputable biotech news outlet at this time, and its credibility is not independently validated by industry benchmarking resources. For critical or investment-grade biotech/health information, it is advisable to cross-reference with established sources.
@wpr101 Really appreciate your review as always! May I get your thoughts on the potential CapEx of $IREN in 2026 and beyond? $IREN’s Sweetwater data center is expected to support over 600,000 GB300s as they said in earning call. The cost of these GPUs alone, according to the current price of GB300 will be $25 billion. This is way more than what they can earn from their existing capacity of bitcoin mining. How do you think $IREN would get this fund?
Looking at OGI, I think you placed a bit too much emphasis on the stock price. In 2021, the company’s P/S ratio peaked at 12.35, extremely high for a company with a negative gross margin. At that time, revenue growth was actually –8.79%, so those valuations were purely speculative rather than performance-based. This was during the early days of cannabis investing, when excitement drove these stocks to unrealistic heights.
Focusing instead on performance since October 2023, when I believe the stock reached a more reasonable level: from October 2023 to June 2025, the company’s share count increased from 81M to 135M about 65% dilution over two years. During the same period, the stock rose from $1.80 to $2.73, a 51% gain. Altogether, the market cap grew by roughly 150% over that span.
Looking at revenue, OGI’s Q2 report showed 74% YoY growth, but the company noted that this was “primarily driven by contributions from the Motif acquisition.” That quarter was the first to reflect a full period of Motif’s impact. Before that acquisition, OGI’s revenue growth was below 30% YoY.
My personal view is that OGI isn’t a true growth stock yet, since most of its expansion so far has come from acquisitions rather than organic growth. Management’s optimism seems to be the only thing pointing towards this being a growth stock. I see the potential for it to become a growth company, but I’d like to see consistent performance before I’d label it as one.
I’m curious, what’s the main reason you consider it a growth stock?
Got a really helpful comment over on Youtube that BioHarvest is producing “exosomes” and not “exomes”. It seems the difference is exosomes are made through cell cultures that store chemicals. These exosomes are valued for their high absorption, bioavailability and use in drug delivery, tissue generation, anti-inflammatory treatments, and advanced skin care (according to AI). This is an updated understanding for myself of what they are doing here, and it does sound like a significant innovation to me.
That’s literally built into the bitcoin mechanism. So by its very nature, the economics of bitcoin mining get worse every day. And that leads to a topic all its own as to what happens when no-one wants to mine bitcoin anymore (or all the bitcoins are mined)? Without mining, there is not Proof-of-Work consensus. If there aren’t miners to validate new copies of the ledger, the blockchain would fall under attack, rendering bitcoin as a store of value useless. But, that’s a topic for another thread, probably another board.
The economics of mining depend on two factors which are the mining difficulty and the price of Bitcoin. The mining difficulty adjusts every two weeks and handles demand or supply shocks. What it means is if the price crashes, a lot of miners typically go offline, but correspondingly the difficulty to mine gets easier and the remaining miners benefit from this. Coins are mined up till the year 2140, and then transactions fees power the network after that as transaction fees are already part of the reward the miners collect now.
Basically if a lot of miners leave, then it gets more profitable for the existing miners. On the other hand as the price rises, miners look to scale up and this plays into the boom and bust cycle of Bitcoin. The system has survived big crashes like Mt. Gox and more recently FTX, and still come out of those okay.
Hi William - sorry, a bit late getting around to this but how is your thinking on the comparison between Dave and Bravura? Do you contrast them at all or just as independent investment opportunities or do you feel that US vs Ex US is sufficient differentiation in their fields of play?
Interesting, I wouldn’t necessarily have put Dave and Bravura in the same type of bucket although they are both fin-tech and do have a UI for users. I see Dave as a sort of alternative bank in the US, and probably their biggest competitor in the space is Sezzle, along with a cohort of other banking solutions.
What I gathered about Bravura, is they provide a platform for companies to host insurance, pensions plans, and possibly brokerages or mutual funds. I think they are basically a SaaS platform that sells to financial institutions in the UK like Lloyds. I’m guessing they allow Lloyds (and other customers) to white label their platform and make it appear to be the bank’s platform. It seems like a decent enough business model and the year over year growth looks okay. As I mentioned in the video though about 2-3 years ago they had a similar level of revenue, so I’m not sure what happened in between where they fell off. That’s probably a thread worth pulling on to gain some confidence on this company.
I’ve been getting more interested in Ex-US companies recently but for companies which do not offer an ADR or dual listing it’s still a bit of a pain tactically. I made a beginner mistake over on Interactive Brokers a few months ago with currency conversion to buy a foreign stock, so I’m being a bit cautious to make sure I understand how this works first.
I’m really liking that there are so many smaller Canadian companies dual listed right now, and many of them trade at small valuations compared to their American competitors. They have basically the same regulatory system as the US and good protections in place that a US based investor would expect. I find the same about companies from the UK and Australia as well that they are reasonably strong on regulations and compliance.
I just recently learned that the Chinese markets have tightened up regulations significantly in 2025 along with Nasdaq doing the same on their side for these same issues that are dual listed. Additionally, I’ve been looking at Taiwan as well recently, tons of manufacturing and semiconductors that are growing 40%+ with strong profitability. Some of them have large valuations as well, but it’s definitely interesting.
Great question there, it’s an open question about how quickly IREN is willing to scale up versus the cost of capital they are getting to do that. It seems they raised a bunch of capital through 850M of convertible notes due in 2031. They are already profitable with their Bitcoin mining operation but it’s simply not enough capital to reach they scale they want quickly enough. Fortunately as the company gets capacity online that starts adding back to revenue and can help finance the next round. From IREN’s actions so far, it seems like their purchase orders of Blackwell double each round. I’m guessing internally there’s a lot of discussions about this sweet-spot for the rate to scale their business.
I saw a take on Twitter that all of that 2.9 GW is going to be eventually mining Bitcoin or hosting HPC. The company themselves said, the Childress facility alone is going to store 70B+ worth of AI infrastructure which sounds huge. Of course, their success is going to depend on how quickly they can scale up, make milestones, and get customers online.
Fair take here. Organigram is probably the least like the other companies I own, and it is rare for me to lead with a pitch about valuation. In this case I see a completely neglected industry by the market. Normally growth through acquisition is not a trait I’m looking for with a company, but in this case they seem to have gotten a great deal.
On both an objective P/S measurement and on relative value the company is extremely cheap. The enterprise value for the company is 178M (257M market cap, 86M cash, 7M debt) and with the latest quarter having 52M this makes the run-rate P/S ratio for this company be 0.86x
Comparing to the IPO, the market cap for this company debuted around 4B when they peaked around 20M of revenue, which makes their run-rate P/S ratio about 50 back then. So you have a company which once had a lot of hype and got all the way up to a 50 P/S ratio, and now that same company has stronger growth prospects than ever and has a P/S ratio of 0.86x. Additionally just on a per share basis, it was $30 and now trades below $2.
Another odd factor in my investment here is with regards to the next quarter. They did quite a lot of complaining about their ERP system on the last call. At first, I thought it was a red flag to be blaming some software. It’s not a great look from management, at the same what they were saying here is revenue would have been higher otherwise. Analysts are only projecting revenue of 53M next quarter or +1M sequentially. Based off what the company is saying in their latest call, I’m expecting to get around 60M or more to want to continue here. Will agree this company does have a bit of story stock element with a lot of enthusiasm from management. It is growth through acquisition, but I find the valuation extremely compelling on its own.
I’ll add one more scenario that was similar recently was with the company Powerfleet AIOT. I thought this company was going to grow but I was wrong on that take. It was a strange tri-merger situation where three companies were merging. The results way underperformed in what the revenue was, but the expectations from the company were tiny and the company was already in deep value territory. Even being wrong here returned a 30% gain in 2 months of holding, which is an enormous CAGR return if that can be repeated. In the case of OGI I wouldn’t be surprised if the revenue misses my 60M number and comes in at 55M, but the stock still rallies anyways just because of how much pessimism is priced in.
Looking at their most recent report I think your using the wrong values. I see cash at 36M CDN, which converts to 26M USD. They have a total of 133M CDN in debt, which converts to 95 M USD. 257M is the correct market cap. So I would get the EV for the company to be 326M (EV = Market cap + total debt - cash & cash equivalent. Which would give it an EV/S ratio of 1.57 for the run rate. Which is on the lower side of the Canadian average for Cannabis growers that is 1-3 ratio. Canadian companies historically trade at a weaker ratios than US companies. This industry as well trades at lower multiples than other industries due to shifting regulations and low profit.
Attached is OGI Q3 interim Financial Statements.
While I see growth potential from managements words and from the Q2 to Q3 QoQ growth of 7%. I’m not sure its underpriced on value metrics, it could be on growth potential. Still digging deeper into their conference calls and reports before I commit.
The cash and debt figured I got are directly from their earnings press release, and which comes two months after the financial statement linked. They said,
Total Cash: $85.9 million, including $35.9 million of unrestricted cash; and negligible debt.
Your right though that these numbers are in CAD and I was comparing to a USD market cap.
The point I was looking to make wasn’t whether the P/S is 0.86x or 1.5x currently, it’s that the P/S was 50x five years ago when the company IPO’d. To me this shows how fast this stock could run up if even half of that enthusiasm from the market comes back to this industry.
Some of the bigger winners I’ve had over the last couple years have come from industries where everyone assumed they were dead. A good example is SuperMicro where the vast majority of market participants assumed AI servers were a commodity, yet the stock returned 1200%+ in 9 months during it’s run-up in 2023-2024.
I had this on my radar back when I had Tilray, IIPR, etc as smaller holdings. None of them lasted and I probably lost money on those.