Why We Picked This Smallcap Stock for a Post Coronavirus World

May 28, 2020

January 2020 seems like a long time ago.

It was when travelling to office was the norm. I had a set routine after office hours. I would go to the new Curefit gym that had opened nearby.

The gym had opened recently around a year back. It was different from other traditional gyms. With a variety of workouts, I found it more exciting than the monotonous gyms we see all round. A trip to the Gym after office was refreshing.

Then came Covid-19.

Suddenly everything came to a sudden halt. Going to office turned to work from home. Gyms, restaurants, malls were suddenly shut. Their future was suddenly uncertain.

How would gyms ever open now, I thought? Won't people avoid crowded places?

I thought I might not go back for a long time. Its peer and a bigger brand, Gold's Gym, filed for bankruptcy in US. I feared the same fate for my favourite gym too.

But few days into the lockdown I was in for a pleasant surprise. While I couldn't go to Curefit, Curefit came home.

They had set up majority of the exercises online. I had to just switch on my phone or a laptop. The trainer was right in front of me and I just had to follow him.

I could log in anytime of the day and do my workout. This was even better than before. I didn't need to travel and could choose which exercise I wanted at anytime.

Curefit had just turned a crisis into an opportunity. Yes, they've had to downsize staff and shut few centers too. But this switch to technology has opened up a whole new customer base for them.

That's what a good company does.

--- Advertisement ---
Asian Paints offered 2,372%, This Stock Has Similar Potential

Asian Paints stock went from Rs 72 in 2009 to Rs 1,780 now.

A mind-blowing return of 2,372%

Do you know, there is one stock which has similar potential?

A little company which very few people know about.

In fact, Asian Paints itself relies heavily on the technology of this company.

Its stock price is already up by 35% in last one year.

With its entry into a fast growing Rs 4 trillion industry... there is no limit to how high the stock price can potentially go.

More details about this stock will be revealed at our 'One Stock Crorepati' Mega Summit on 17th July.

Click here to sign-up.
------------------------------

The management thinks of ways to adapt and survive during a crisis. This makes them stronger as their peers fail to do so and fall by the wayside.

In the listed space, TTK prestige comes to mind immediately.

In 1978, on a visit to north India, the Chairman found that TTK's pressure cookers were bursting. Nobody was buying TTK cookers for this reason. Nobody would risk their lives for a simple kitchen appliance.

The reason was defective spare parts that customers were using. The chairman went back to his factory and came up with GRS (Gasket release system). It was a rubber ring that would hold the lid firmly in place. TTK would have had to shut shop if it weren't for that innovation.

It has continued this culture of adaptation and innovation since then. No wonder its shareholders have been rewarded handsomely. The stock is up 300 times over the last 18 years.

This is what we look for in smallcaps for our Hidden Treasure service as well. A culture of adaptability. A company with a management that looks to turn every crisis into an opportunity.

Take our recent Hidden treasure recommendation for example.

Hidden Treasure subscribers can access this stock opportunity here. Please remember to log in to your account.

URGENT OPPORTUNITY: Top 5 Stocks That Could Potentially Give the First 50-100% Gains Very Fast

Amid the coronavirus crisis, this company has adapted quickly and found new ways to get its product across to the customer.

The company's traditional modes of selling via retail and modern trade outlets were shut during the lockdown.

What did the company do? It got it's products across to food delivery platforms. Being an essential item with a strong brand recall, it knew its products would have a demand irrespective of the crisis.

The recent buying of shares by the management is also a positive sign.

When the uncertainty surrounding this crisis is over, this company is bound to survive and get stronger in the process.

It is important to look at similar characteristics when picking the right smallcap stocks. Look at businesses quick enough to adapt and innovate. In the current crisis, you will find these smallcaps at mouthwatering valuations.

Get it right and you have an opportunity of a decade right in front of you.

Warm regards,

Girish Shetty
Girish Shetty
Research Analyst, Hidden Treasure
Equitymaster Agora Research Private Limited (Research Analyst)

PS: For Richa Agarwal's #1 stock of 2020... please click here.

Recent Articles

Your Chance to Become an Atmanirbhar Investor Today July 10, 2020
Become an atmanirbhar investor by listening to this market guru.
Is It Time for Caution in the Stock Market? July 9, 2020
Stocks with weak fundamentals are moving up 10-20% daily. Is this a sign that the end of the bull market is near?
Congratulations! You Made Warren Buffett Jealous this Year. Now Make Your Success Count... July 8, 2020
The superb experience of this quick bull market may not be everlasting for everyone.
From a 57% Fall to Gains of 168%. This is What a Smallcap Rebound Really Looks Like July 7, 2020
This smallcap is essential enough to continue business even amid a second wave of infections, or lockdown.

Equitymaster requests your view! Post a comment on "Why We Picked This Smallcap Stock for a Post Coronavirus World". Click here!