Of Picking Out
High-Potential Small Caps
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3 'Rare' Dividend Paying Small Caps
On 15th February, 2008... i.e. about 6 Years back, we picked out our first Small Cap Stock.
After much deliberation, in-depth research and testing it across multiple factors... we found it to be an excellent opportunity.
So, we recommended a select group of investors to Buy it and tracked it for them over the coming months.
Keeping them updated on its performance.
Ensuring that our assumptions were right and the company was strong on its growth path.
The efforts paid off!
On 12th October, 2008, we sent out an Urgent Email to our subscribers, asking them to Book their profits!
Our First Small Cap Stock recommendation gave our subscribers an impressive 87% in just 8 months.
Yes... a stock which we had picked out for an investment period of 3 - 5 years (as we do for all our small cap stocks) gave a big boost to our confidence, and big returns to our subscribers who invested in it!
We had been doing research for 12 years at that point in time and we knew we had the experience and caliber to start picking out high-potential stocks from these under-researched stocks.
So, over the year we picked out more....
2008 stock picks gave our subscribers returns like:
So, over the coming months...
Then came the impact of the 2008 market crash...
But we were confident of our research process and we knew that small caps which were handled by able management, had strong fundamentals, were already leaders in their niche market segment and had met all our research parameters would come out as winners in the long run!
So we kept faith in our process and continued to research and recommend more stocks.
The next year, 2009 saw stock picks which gave our subscribers Triple Digit Returns even though the complete market came down in one of the biggest ever crashes!
Yes... it took longer for most of these stocks to multiply than it took for our first stock pick... but then, we always recommend our subscribers to invest with a long-term perspective.
So, even from our 2009 picks, we saw exciting returns like:
Our subscribers were ecstatic!
The Market was exciting.
The Stock Market showed its flipside!
The next year, turned out to be the worst year for our small cap service.
2010 saw our stock picks dwindling down and, rightly so, we even got letters from our subscribers complaining to us.
Now, the reason we entered this industry is to provide quality research to individual investors, like you, and we take this responsibility extremely seriously.
So, we went back to the drawing boards; looking to make further improvements in our processes and spending that much extra time to ensure that YOUR investments do not suffer due to any avoidable reasons.
We strongly believe that Huge Profits should NOT come with huge risks... and wealth creation from stock market investments is possible, safely!
So, we made THE INVESTMENT which is PAYING DIVIDENDS now...
To sum up, it was a tough learning experience for us but these investments paid immediate dividends...
The complete service bounced back and today it's One Of Our Most Popular Services!
With thousands of subscribers and a solid track record... we can confidently say that our research processes have worked!
So, you must be thinking, how was 2011?
Or even 2012 for that matter...
I'll tell you all about it! Right to the latest stock pick...
But keep in mind that all our small cap stocks are picked out for an investment period of 3-5 years and the ones from last year could take some time to reach their true potential...
But before we come to details, allow me to introduce myself and my team to you.
Hi, I am Rahul Goel and I am the CEO of Equitymaster.
Equitymaster, as you may know, is an independent equity research house based out of Mumbai, India.
We have been in the industry for over 18 years now and are proud to have 1,484,807 readers across 71 countries worldwide.
We were the first financial website of India and have many individual investors benefitting from our research.
We are not backed by any industrial house or sponsored by any broking house. Our only source of income is what our valued subscribers pay for our services and the advertisements on our website.
This approach has allowed us to be brutally honest and completely unbiased in our recommendations.
And these are the values that have helped us earn the trust of our readers like you.
Here's what one of our subscribers wrote across to us...
Now let's come back to what we started with....
As I shared earlier... after many of our stock picks plummeted in 2010, we further fine-tuned our stock selection process and came out with a 'New Improved' service that has performed really well...
2011 was our turnaround year.
After implementing new processes and with even more researchers spending hours scrutinizing each and every stock pick... we got back on track.
Our stock picks started making substantial returns for our subscribers again.
From our 2011 stock picks, we have already booked profits like:
So, we knew we were on the right track and the service's turnaround story had begun.
But we knew that by making one more change to our research process we could lay the foundation for an even better performance track record in the years to come...
So we went ahead and introduced...
"Buy at a Lower Price."
This new stock rating allowed us to recommend stocks which are fundamentally strong but are not available at a discount right now.
As we shared earlier, we strongly believe in maintaining a margin of safety in all our recommendations.
Thus, these 'Buy at a Lower Price' recommendations gave our subscribers certain stocks which they could track, along with us, and invest in when it hits the 'Buy Price' that we clearly state in.
As Warren Buffett puts it, "We do not get paid for activity, just for being right".
So, you can rest assured that whenever you get a recommendation from us, it is our honest & completely unbiased view.
Also, this proactive approach towards consistent improvement is what differentiates us from any other service out there.
We are proud to share that our subscribers appreciate our efforts, as one of them wrote back to us sharing his experience...
The Year when all our Investments Paid off!
Then came 2012... that saw each and every stock we recommended, picking up and earning big returns for our subscribers who invested in it.
At the start of 2013, all our stock picks from 2012 were in Green.
Till today, we've closed just 2 positions from our 2012 recommendations and both of them have given excellent returns!
The first position we closed, gave us 123% returns in just 3 months.
Yes... we are extra-cautious about a stock if it picks up far too fast.
Now we don't want you to get the wrong picture.
Not all Small cap stocks will jump up this much... this soon!
In fact, from our experience, you could expect 3 of every 5 small cap recommendations to perform well over time. However, if you pick your stocks well, even this success ratio could do wonders for your portfolio!
The second position was recently closed at a profit of 160% in just less than 2 years.
Now, we shouldn't even be looking at the stocks we've recommended in 2013 because there's still a long way to go for them... but I would like to share a few picks that outperformed our expectations or have started on a strong note.
In fact, we believe that even other recommendations hold the potential to deliver high returns over time and our research team is tracking them closely to ensure they stay on the right growth path.
And we're delighted to share that there are thousands of our subscribers who are already benefitting from this services!
Here's what one of them wrote to us...
And today, we have something Extra Special for you.
We understand that due to the current market volatility, you might not be investing in stocks right away.
Even though none amongst us can say with certainty when the market will stabilize and at what levels... we both know that strong small caps could create solid wealth when the market reaches its true potential.
This is why we wanted to make it extremely easy for you to join this service and at least stay updated on the opportunities that the current market offers and create long term wealth...
Thus, we have an Annual Subscription Plan that allows you to subscribe to this service at More Than 60% Off!
So, even if you aren't investing in the market right now, you could benefit from this service over the following year...
Of course I will give you full details on this Plan and would also invite you to join us in our endeavor to pick out some of the best Small caps by becoming a part of this exclusive investors group....
However, before we come to that, allow me to share all the things that make this Small Cap Recommendation service unlike anything out there!
Allow me to introduce you to the service behind all these stock picks...
Equitymaster's Extremely Popular
Small Cap Recommendation Service
With thousands of subscribers, a long list of high-potential stock picks, experienced research team and backed with over 18 years of Equitymaster's experience in equity research ... this service is the ideal solution for any investor who wishes to invest in small cap stocks.
All the returns we had shared with you earlier were booked on stocks recommended under this service.
When you join Hidden Treasure, you will start getting one Buy/Buy-at-a-lower-price recommendation every month!
In other words... 12 high-potential small cap opportunities over the year.
We release our Hidden Treasure report on, or before, the 15th of every month.
This report, typically, will give you all the information you need to take an informed investment decision.
Right from our investment rationale behind making the recommendation, investment concerns, the background of the company, key management personnel, complete risk-analysis and the complete valuation of the stock... amongst many other factors.
Now, this is Exclusive Research available only for our valued Hidden Treasure subscribers.
And as mentioned above... we do not just recommend a stock and forget about it.
All our Open Hidden Treasure Positions
Every month, we will release a Monthly Performance Review Report that will cover latest updates on all our open positions.
How have they performed since our recommendation and also whether we maintain our views on the company...
So you can be rest assured that once you invest based on our recommendations, our research team will do everything possible from our end to ensure that it's profitable for you in the long run.
It is because of this commitment, that thousands of current Hidden Treasure Subscribers trust us and invest based on our recommendations.
Then there is Quarterly Result Review too.
In this report, released every 3 months, we analyse the results released by the companies under our coverage.
Together, both these reports ensure that you are updated on all our open recommendations throughout your subscription
And in addition to keeping you informed through these reports, we'll give you Free Access to an online tool, wherein you can track your portfolio yourselves as well...
Equitymaster's Intelligent Portfolio Tracker
Equitymaster's Portfolio Tracker is an online based tool that allows you to track multiple portfolios, Mutual Fund Investments and even create your own Watch List for stocks which you wish to track.
This indispensible service for any smart investor will help you analyse your portfolio across various factors, just like a portfolio manager does.
Intelligent reports like -
These reports could bring out invaluable insights about your portfolio and help you analyse it in detail, just like any smart investor should.
We would like to share that Portfolio Tracker is an organic tool that has gone through various upgrades in the past based on feedback & suggestions we've received from our valuable subscribers.
Making it a Portfolio Tracker that is, to a large extent, designed for and by investors themselves!
Equitymaster's Intelligent Portfolio Tracker service is priced at Rs 330 per annum.
However, with your Hidden Treasure subscription, you will get it Absolutely Free!
Now, before we go ahead and invite you on board..
As I am sure you're aware... Stock Market investments come with inherent risk.
So, we would recommend that you do not put all your eggs in one basket!
In our view, not more than 5-10% of your total portfolio should be invested in Small Caps and even this portion should be diversified across multiple stocks.
Even if just 3 out of these 5 companies turn out to be successful, they could more than make-up for the losses you could've incurred from the other 2 and still leave you with a profit.
And just imagine if even one of them turns out to be like the star performers I discussed earlier, your portfolio could get a great uplift!
So you see, Small Caps, even though they hold high-potential, require smart and reasonable investments.
After all neither of us want one wrong pick to eat into our investments... right?
In fact, even after our years of experience in Equity research, tried and tested processes and an experienced research team... we've seen stocks missing the mark as well.
There could be many reasons behind this:
However we both know that Small Caps hold immense potential in them...
In fact if we look at the last months, Small Cap index gave much higher returns than Large Caps in the Sensex!
Yes, we both know that Small caps are more volatile than Large caps... However, we also know that there is a good long term money-making potential that lies in strong small caps.
And through Hidden Treasure, we aim to pick out such investment opportunities for our valued subscribers.
So, here's what we recommend:
Now we'll confess that...
Take MIC Electronics for example.
We had recommended the stock in July 2009 because we saw immense potential in their business plan and a huge opportunity in the industry.
They had performed well in the past and the industry was offering a huge opportunity.
But then things changed for bad.
The company missed out on an important contract and the stock price started sliding. The management's refusal to step-in and explain their stance further worsened the situation. Then there turned out to be some issues with the company's disclosures too...
So, we were forced to recommend our subscribers to stop their losses and sell the shares at 45% loss.
Here's another example where things changed for bad...
We had recommended Ahluwalia Contracts Ltd in August 2009 because we saw immense potential in their business plan.
Making 'landmark' buildings was this company's niche. It had a dazzling list of high profile and sophisticated buildings, a strong order book, remarkable financials and one of the best operating parameters in the construction industry.
But then things changed...
High competition pulled down the revenue, time & cost overruns increased the costs, company came under the scanner for CWG project and they even had an issue with the Provident Fund Department... And things were not going too well in its core business either.
So, we recommended our subscribers to stop their losses and sell the shares at 60% loss.
And then there was SREI Infra Finance where we incurred a 71% Loss...
However, over the years, our stock-selection process has improved a lot and the biggest credit for it goes to our proprietary risk-assessment tool...
ERMTM, or Equitymaster Risk Matrix, is our proprietary tool that we have developed after scrutinizing and researching the Stock Market for years.
A tool that looks into the financial health of the company; the past track record and even factors like how equipped is the management to take this small cap on its right growth path?
In short, in addition to testing the growth potential of a business, ERMTM helps us minimize the risk taken as well.
All our Hidden Treasure recommendations are tested on ERMTM to ensure that they meet the parameters required to be strong investments.
So, after all this, what we can confidently state is this....
Hold Immense Potential. . .
If You Invest With A Long Term Perspective!
As we shared earlier, the money-making potential in small caps is big! But, it needs smart investments diversified across many small caps.
It needs constant tracking to ensure that the company is on the right growth path.
And it needs exhaustive research to ensure that the company's fundamentals are strong enough to withstand the harsh business environment.
And when you invest in such a company... you could generate a good amount of wealth in long-term.
Just like our current subscribers....
Here's what one of them wrote back to us sharing his experience...
So, we will reiterate... diversifying across multiple small caps will further bring down the total risk of your investments.
And if even one or two of your small cap investments turn out as our winners below, your portfolio will get a big boost...
And to guide you towards creating a well diversified portfolio, we'll also send you our extremely popular...
As we have already emphasized earlier, allocating your investments across various market caps is extremely important to minimize the risk.
This guide titled "How to Plan Your Equity Portfolio" will help you allocate your investments across different market caps.
Covering aspects like the importance of Asset Allocation; understanding the difference between small cap, mid cap and large cap stocks with their respective risks and opportunities and hand-holding you into creating your own well-diversified portfolio... this guide is extremely important for any smart investor.
In addition to all this, you will also get....
Equitymaster's Stock Market Yearbook
Every year, we publish the latest and exhaustive data on Top 300 companies. Plus, a wealth of information on over 20 sectors, the Indian economy, mutual funds... all, in one place.
This invaluable information serves as a ready-reckoner for any smart investor.
Available in an easy-access installable version and a PDF version as well, this Yearbook provides the latest data that could help you make smart investment decisions.
Priced at Rs 750 each, you will receive the 2014 downloadable version right away and the 2015 Edition as soon as we release it.
This is a Special Gift from Team Equitymaster, worth Rs 1,500... Absolutely Free!
And here's something to ensure that you do not miss out on even a single recommendation report we release...
This is a new feature that we've introduced based on a feedback we received from our valued subscribers...
Released every Saturday, this one report will give you a roundup of all the research we've published over the week along with a Special Note written by our research team, highlighting an investment idea as well.
Within weeks of launch, this report has been highly appreciated by our subscribers and many have even shared their experience with us...
And there's more.
As soon as you sign up, you will get...
3 "Rare-Dividend Paying" Small Cap!
Small caps have always been associated with capital growth potential.
In other words... the price of the stock could multiply over the years and generate long-term wealth for its investors.
However, we have zeroed in on 3 "Rare" Small Cap stocks that could not just create long-term wealth for you but will also pay you regular dividends on the way.
In fact, one of these stocks has paid dividends for more than 100 years now!
Full information on these stocks is published under a Special Report titled "Steady income Smallcaps - II".
And you'll get this report Absolutely Free as well!
Here's a glimpse into these 3 rare small caps stocks:
Company # 1
Few investors have heard about this small private sector bank with regional focus.
What is unique about the bank is that there is no promoter. Thus the management of the bank itself is a minority shareholder and acts in the best interest of minority shareholders. The rights issue in FY13 being a case in point.
What also makes us very comfortable about this entity is the management's faith in its conservative business model. The bank has consciously chosen to stay away from risky financial products like personal loans and credit cards...
And instead focused on its main strengths - rural reach and long relationships with some of the best-known business houses in the region.
This approach has helped the bank differentiate itself and also grow at the same time.
And believe it or not, this bank has issued dividends nonstop for over 100 years now!
Company # 2
There are various conflicting theories on what makes a nation prosper and improve the quality of life of its citizens. However, one area where there cannot be any scope for conflict is the area of education.
A country can have the best natural resources and the best demographic advantages. But all of these would come to a nought if its citizenry is not educated enough. Clearly, education is what will put the nation firmly in the path of development.
This company is not only one of the oldest and the biggest manufacturer of educational products in the country, but also has a stellar financial performance to go along with these attributes. In fact, one would be hard pressed to see a small cap company with such a steady performance year after year.
What's more, its double digit growth in topline and profits over the last 8 odd years has come about with the assistance of hardly any debt. This is not all. Even after growing its profits at a healthy pace, it has found enough money to be distributed to shareholders in the form of dividends.
Company # 3
In a country like India, the importance of agriculture can never be stressed upon enough. To say that it is the backbone of the country would not be an exaggeration. Therefore the argument for farm equipment in India would always remain strong. And this company provides the 'heart' of farm equipments.
The company's financial performance has been exceptional right from the very beginning. A firm believer of maintaining a lean organization, the company has been generating healthy returns on capital year after year.
It has a brilliant long term track record of profitability and wealth creation.
The company has also been paying out dividends year after year every year over the past 11 years except for in FY07.
So, in all the 3 cases, you could not just make big returns but also earn steady dividends and grow your investment in two ways at the same time.
Please Note: 2 out of these 3 stocks have already run up quite a bit due the recent bullish market sentiments. So, we won't recommend that you buy all of them right away.
As we shared earlier, our "Buy at a Lower Price" Recommendations help our valued subscribers track strong small caps right along with us and invest in as soon as they hit the Buy Price.
So, we'd recommend that once you join in, you track these 2 as well and Buy-in when the stock corrects to hits the recommended Buy-Price.
And of course all along we will keep looking out in the market for more and new high-potential small cap investment opportunities for you!
Over the year, you will get 12 Buy/Buy-at-a-lower price Recommendations as a member of Hidden Treasures.
Now that you understand the risks and the returns potential from small caps, I'd like to extend this invitation to you...
And Benefit From Our Research. . .
Hidden Treasure is priced at Rs 5,000 per annum.
And, if you look at the potential that lies in these stock picks, this price in itself seems appropriate...
However, as we shared earlier...
Right now, you we have something Extra Special for you!
Yes, that's more than 60% Off!
In fact, Rs 1,950 for 1 year comes to just Rs 162.50 per month! This is nearly the price of a cup of coffee at one of these new age cafes...
And for such a low price, you can get 12 High-Potential Small Caps over a period of 12 Months... in addition to all the other benefits I mentioned above!
So, make the most of this opportunity and invest in fundamentally strong small caps that could create long-term wealth for you...
We're sure that this is an extremely exciting offer for any smart investor...
Here are some of the small cap stocks we've picked out in the past and the returns they've generated for our members who invested on our recommendation:
As you can see... the money-making potential in strong small caps is immense. However, you need to invest smartly and with a long term perspective.
See, we understand that the current market uncertainty has led many investors to completely stop buying any stock... leave aside a small cap.
In such a scenario, you might ask... "Why should I subscribe to your service at this point in time?"
And to tell you the truth, we appreciate if you do!
Because it shows that you are serious about your investments...
Yes this Rs 1,950 is an Investment in itself!
An investment that could help you pick some of the best Small Caps that the market has to offer.
And our new Stock Rating "Buy at a Lower Price" ensures that you keep getting fundamentally strong small caps which you could track along with us and invest in as soon as it hits the Buy price (We clearly mention the Buy price in all our Hidden Treasure recommendations)
So, we would recommend that you do not postpone taking this decision and join us today in picking out some of the most solid small caps from the market.
And here's another reason you should join Hidden Treasure right away...
Joining Hidden Treasure could be...
We accept that we told you that there are no investments with zero risk.
However, subscribing to Hidden Treasure comes with our 30 Days, No-Questions-Asked, 100% Money-back Policy!
So you have absolutely nothing to worry about...
Join us through this offer and experience Hidden Treasure yourself for the next 30 days before you make up your mind.
If any time during these 30 days, you feel that this service is not for you, just give us a call and we'll refund the whole amount you paid!
Right to the last Rupee.
That's our Promise!
And you can also keep anything you download during this time as a thank-you gift from team Equitymaster for trying our service,
Sounds unbelievable... right?
However, we're here for the long-run and we would not want you to subscribe to a service that you aren't benefitting from.
So, let's sum it up...
So, if you're interested in investing in small caps... THIS is the best investment you can make!
Our research team will not just pick out some of the strongest small caps, available at a discount, but also track them consistently for you and keep you updated.
And the current subscription plan makes it a perfect time to join this exclusive club of investors!
Click Here to Join Equitymaster's Hidden Treasure at Just Rs 1,950...
Okay, one thing I missed out on sharing...
We had recommended this stock on 15th January 2009.
Yes, we haven't given a Sell on it yet....
So, I'm sure you'll understand that I cannot share the name of the stock here...
However, today, this stock stands at a profit of 1,816% in just over 5 Years.
Had you invested just Rs 10,000 in this stock when we recommended it, your investment would be worth Rs 191,600 today!
This is the money-making potential in small caps!
At this point, price should not even be a factor because the money-making potential in these stock picks is such that even a single stock turning into a winner could pay for the subscription and earn you huge returns as well.
So, don't delay...
Click Here to Join One of our Most Popular services at Just Rs 1,950!
I look forward to you joining us and creating long-term wealth from some of the most-lucrative small caps out there.
To your Wealth, Always,
P.S.: 6 Years of researching in and picking out high-potential small caps has taught us many lessons. Lessons that set us apart from any other service out there and lessons that are already proving out to be profitable for our valued subscribers. However, don't take our word for it... Click Here to Try Hidden Treasure without any risk through our 30 Days Money-back Policy.
P.P.S.: Here's what one of our subscribers shared about his experience with Equitymaster...
Click Here to Join us in our efforts to find out the rare High Potential Small Caps!
P.P.P.S.: If you have any queries, please do not hesitate to contact us at +91-22-61434055 or Write in to us. We will be delighted to assist you!
More Than 60% Off!