About Global Small Cap
Global Small Cap is focused on finding global small cap compounders. We publish deep dives every 3 to 4 weeks with regular updates on followed companies.
Expect coverage to be 50% Europe, 20% APAC, 20 Japan, and 10% ROW with companies mostly <$10bn and often <$1bn in market cap across all sectors.
What we look for
The reason we’re passionate about global small caps is simple: global small caps have the longest runway for potential compounding. There are several characteristics we look for:
Moat. Companies with a sustainable moats: barriers to entry, stickiness, network effects, scale economies, brand, or even culture or an unusually talented management. We want moats that are widening over time that, which as WCM puts it, can “fight the fade”.
Growth. We want a long runway for organic or inorganic growth or alternatively, or for slower growing businesses, a clear capital return policy. At the end of the day, growth is what drives compounding.
Economics. We want strong economics demonstrated by high returns on capital but we’re ok underwriting strong unit economics that might not show up in the financials today. Global compounders should either be the low cost player or have pricing power and ideally both.
Management. A management team that is properly aligned, with skin in the game, that is obsessed with creating shareholder value, which normally means managers that are obsessed with creating value for customers. We love unique cultures, which often times may seem quirky or cult-ish to traditional investors.
Risk vs. Uncertainty. We look at risk as a permanent impairment of capital which normally results from leverage, products that are commodities, fads, or industry structures that invite excess competition. We are ok with uncertainty but we will avoid risk.
What each deep dive covers
Each deep dive includes:
Investment Case with Bull Case, Bear Case and a Buy Range
An Industry Primer
Deep Dive on the Business
Overview of Each Segment
Competition & Moat
Unit Economics
Key Growth Drivers
Key Risks
Management & Capital Allocation
Valuation
The goal is not to produce hot tips. Our goal is to build a useful body of research for patient investors who can act with conviction when opportunities strike.
How we work
The research begins with primary sources: annual reports, regulatory filings, earnings calls, investor presentations, industry material and competitor disclosures. We examine a company across a full cycle rather than extrapolating from its latest quarter. We always put the research within the broader context of the industry. We don’t write AI slop and that should be obvious based on the quality of our work.
About me
Right now, this is a sole endeavor but I may invite more authors to the party. I have a global background and I’ve lived in multiple continents. I have worked in both the sell-side buyside. Right now, I am primarily a consultant with a variety of side projects but my passion is travelling and using stocks and investing as a way to understand and explore new cultures.
Disclosure
Global Small Cap is published for informational and educational purposes only. Nothing published here constitutes investment advice or a recommendation to buy or sell any security. I may hold positions in companies discussed. Readers should conduct their own research and make decisions appropriate to their circumstances.
