Small Caps ??!?
I did build a separate small cap portfolio at 12/31. It is shown below.
These are roughly market caps below $2 billion. In a perfect world this could be my portfolio. What would be a perfect world?
a market that is at least 20-25% off its high, like late 2022
a world where credit spreads are not at all time lows, to me this is the best measure of speculative excess
a world with little less risk - China banking, US commercial real estate risk, currency issues, and a small inflation fear
a little more political stability - the tariff issue is little concerning, yes I am a Smoot Hawley guy.
Right now I would like to integrate 4-5 of these small cap stocks into the main portfolio, and own a few less $20+ billion (I have 8 right now).
I am very happy with the Top 25 Model Portfolio in terms of risk and diversification, but in reality Kinder Morgan, Sysco, Alexandria, and Halliburton are just placeholders waiting for more creative names. Tyson, Nutrien, Restaurant Brands, and Teck Resources are top names that are core holdings.
Small caps are cheaper. This portfolio below is about 1.5x book, and the main portfolio is about 2.0x book. The small cap balance sheets are weaker, and that is a problem.
I also need to know these small cap stories a little better. That is a goal for 2025. These are 12/31 prices:
Jack in the Box - JACK - $42 - burger franchises
Titan International - TWI - $7 - wheels and tires for ag equipment
Atlas Energy - AESI - $22 - fracking sand
Stepan - SCL - $64 - insulation chemicals
Krispy Kreme - DNUT - $10 - doughnuts
Hudbay Minerals - HBM - $8 - copper
Oxford Ind. - OXM - $79 - Tommy Bahama
Rogers - ROG - $102 - tech chemicals
MGP Ingredients - MGPI - $39 - liquor
NovaGold - NG - $3 - Canadian gold
Portillo’s - PTLO - $9 - hot dogs
Magnite - MGNI - $16 - advertising
Astrana Health - ASTH - $31 - physician centric healthcare
Ultra Clean - UCTT - $35 - semi-equip
Wabash National - WNC - $17 - truck trailers
Energy Recovery - ERII - $15 - desalinization equipment
Universal Corp. - UVV - $55 - tobacco broker
FIGS - FIGS - $6 - healthcare uniforms
Northwest Natural - NWN - $39 - natural gas distribution
Vitesse Energy - VTS - $25 - oil royalties
MidwestOne Financial - MOFG - $29 - Iowa bank
Douglas Dynamics - PLOW - $24 - snow removal equipment
Tronox - TROX - $10 - titanium dioxide
TreeHouse Foods - THS - $35 - generic food
Azenta - AZTA - $50 - genome storage