This is Part Two of our Q3 Microcap Quality Index (MSMqi) review. It convers 34 stocks.
Part One can be accessed at this link, where I covered 27 stocks.
The goal here is the same as part one. I am coding stocks green, yellow, or red based on conviction, story, and short term price targets. Green means high conviction, yellow means I like the business but either the stock has run too much or there are near term issues or open ended question to work through, and red is the penalty box.
I started with GENC 0.00%↑. I have followed this company since the 1990s. They make road construction equipment and sit on a pile of cash of $9.30 , with book value per share sitting at $14.36. However, management has really never done much with the cash. They were late with filings, the stock sold off, and now trade not far from cash per share. However, the late filings issues was the result of their auditor getting acquired. The issues has now been resolved and filings are all up to date. If management ever decides to use the balance sheet to grow or buy back stock, this could get interesting. GENC is a good candidate for activists to get involved with.
OSPN 0.00%↑ does not have great growth estimates, but they consistently beat numbers. They also did a tender offer at ten dollars when we first added it. That is enough for me to keep it coded yellow. Think of this company as a DocuSign on steroids.
CMT 0.00%↑ is a cyclical industrial molding business, but recent wins in EV and aerospace suggest they are trying to move into less cyclical markets. That could eventually drive a higher multiple. Worth monitoring.
$CVALF $COV.V is still in yellow. The new CEO got them profitable, but growth has stalled. They hired bankers to explore options, and while patience is wearing thin, I give them credit for being transparent about growth not going to be be linear.
RAVE 0.00%↑ , the pizza buffet chain, is green for me. Growth is slow but steady. I like the CEO’s track record, and it is a good non tech play for the portfolio.
$BTQNF $BQE.V does water treatment for mines. It is lumpy, but there is recurring revenue and the long term setup looks interesting. I have it in yellow, with the chance to go green if revenue becomes more predictable.
MLR 0.00%↑ the tow truck equipment maker, had activists involved. It ran early, then fell back on weak quarters. I still watch it because estimates show a rebound in 2026 and 2027 and it’s trading a low valuation on these estimates.
NSYS 0.00%↑ is an Electronic Manufacturing Service (EMS) company, just like $BELFA, a multibagger in our MSMqi. Revenue is down but earnings are showing signs of turning. I like these types of turnarounds when revenue has not yet inflected but earnings have. That is when screens usually miss them.
SGC 0.00%↑, a uniform maker brand products marketing company, looks like it is entering an extended EPS growth cycle. The 2026 numbers are strong and could justify a re rating. I love these types of predictable set-ups.
$AMNF is in food products. They have been delivering steady growth and margins look solid. It is a nice recession resistant that pays a dividend which was just increased.
TZOO 0.00%↑ is a good growth profile as they transition to subscription revenue. I flagged a governance issue around a shady transaction, so it stays green based on the numbers but with a watch on management.
$CPHRF $$CPH.TO has turned into a lot more than a “nail fungus story.” The acquisition of a scabies and lice treatment with a US sales force gives them momentum. They are buying back stock and allocating capital well. It is still in yellow but could move up.
$SUMXF $SXP.TO is in envelopes and packaging. Estimates look solid and valuation is low. I should probably code this a high alert yellow.
UG 0.00%↑ has strong margins and a new product launch coming. If they get growth on top of 25 percent operating margins, that could be a big win. Definitely worth watching closely.
Toward the end I talked through names like LFVN 0.00%↑, $CANOF, and others that are either in wait and see mode or too cyclical to call right now. Some could be buy on pullback candidates if they prove out their growth.
Overall, the theme in this part was similar to part one. I am watching for companies that can move out of cyclical industries into more predictable revenue, CEOs who have a track record of delivering, and special situations where balance sheet value or backlog can trigger a re rating. The platform structure lets us keep adjusting conviction in real time
The Presentation links that go along the video are available below.
