Small-Cap Stock Analysis: Alta Global Group, Mineros S.A., American Outdoor Brands, AI Venture Capital, and Trulieve
The TDR Three Key Takeaways regarding Small-Cap Stock and Small Cap Company:
- Alta Global Group reported a 51% revenue growth last year, reaching $1 million.
- American Outdoor Brands reported $126 million in working capital, revenue of $200 million, and levered free cash flow of $12 million last year.
- Trulieve’s revenue growth has been strong, with a three-year CAGR of 30%, although it has slowed in the last 12 months as the company prepares for potential growth in the Florida market.
“Small-Cap Sunday” Bill McNarland and Shadd Dales analyze five small-cap stocks: Alta Global Group (NYSE: MMA), Mineros S.A. (TSX: MSA; OTC: MNSAF), American Outdoor Brands (NASDAQ: AOUT), AI Venture Capital (TSXV: AIVC), and Trulieve (CSE: TRUL, OTCQX: TCNNF), examining their market positions, financial health, and future prospects.
Alta Global Group (NYSE: MMA) represents an innovative blend of mixed martial arts (MMA) and technology. Co-founded by John Cavanaugh, Conor McGregor’s head coach, alongside a finance expert and a tech specialist, Alta Global has created a global platform aimed at aspiring MMA fighters. This platform provides training, coaching, and community engagement opportunities, positioning itself as a pioneering force in the MMA industry. Currently priced at $3.10, with a market cap of $31 million and 10.2 million shares outstanding, the company reported a 51% revenue growth last year, reaching $1 million. Despite a burn rate of $4 million annually, Alta Global holds $9 million in current assets. The company’s IPO was priced at $5, but shares have since dipped, offering an intriguing value opportunity for investors interested in small-cap stock. The involvement of Conor McGregor as an investor adds significant credibility and market interest.
Mineros S.A., based in Medellin, Colombia, is a testament to success in the gold mining sector. With operations in Colombia and Nicaragua and exploration in Chile, Mineros S.A. has proven its ability to produce gold efficiently and profitably. Trading at $1.09, with a market cap of $320 million and 299 million shares outstanding, Mineros S.A. has a gross margin of 31%. The company’s tangible book value exceeds its market cap at $329 million, suggesting potential undervaluation. Mineros S.A. also boasts a dividend yield of 9.32%, supported by strong financials including $626 million in revenue, an EBITDA of $230 million, and levered free cash flow of $73 million. The company’s ability to maintain a spread of over $600 per ounce between production costs and selling prices underscores its operational efficiency and financial stability.
American Outdoor Brands (NASDAQ: AOUT), headquartered in Missouri, is a mature company with a significant focus on innovation and growth. The company falls in the small-cap stock category. Offering a wide range of outdoor equipment, the company has a robust R&D program, leading to a substantial portfolio of patents. Trading at $12.02 with a market cap of $155 million and 12.9 million shares outstanding, American Outdoor Brands has a gross margin of 44% and SG&A expenses at 47%. The company’s 392 patents, with a 30% increase over the last three years, reflect its commitment to innovation. With $126 million in working capital, revenue of $200 million, and levered free cash flow of $12 million, the company’s significant investment in R&D positions it well for future growth, making it an intriguing investment in the competitive outdoor market.
AI Venture Capital (TSXV: AIVC) presents a high-risk scenario. Despite the buzz around AI, this venture capital and private equity firm lacks transparency and detailed financial information. Trading at 22.5 cents with a market cap of $8.3 million and 32 million shares outstanding, AI Venture Capital’s financials reveal a cash burn of $100,000 annually and $1.1 million in assets. The absence of recent news updates and concrete financials makes this a speculative and risky investment in small-cap stock niche. The company’s valuation seems driven more by the current AI hype than by solid business fundamentals.
Trulieve, a leading multi-state operator in the cannabis industry and small-cap stock. The company is well-positioned for significant growth, especially with potential legislative changes in key markets like Florida. Trading at $9.25, with a market cap of $1.9 billion, Trulieve operates 136 dispensaries across nine states. The company’s revenue growth has been strong, with a three-year CAGR of 30%, although it has slowed in the last 12 months as the company prepares for potential growth in the Florida market. Trulieve’s gross margin stands at 53.6%, with a cash flow margin of 26.4%. The company’s current ratio is 5, indicating strong liquidity, and it has less leverage compared to its peers. With a fair value estimate of $15.29, indicating over 50% upside potential, Trulieve’s strategic positioning and robust financials make it a standout in the cannabis sector.
Investing in small-cap stocks requires navigating volatility and conducting thorough research. Companies like Alta Global Group, Mineros S.A., American Outdoor Brands, and Trulieve offer promising opportunities with solid financials and growth potential. Conversely,AI Venture Capital serves as a cautionary example of the risks involved in investing based on market hype rather than thorough research and analysis. As always, investors should carefully consider the risks and rewards associated with small-cap stocks.