5 Micro-Cap Materials Plays Attracting the Smart Money

Michael Teague  |

Investors who are looking for that tiny materials play with good upside potential will need more than a great deal of patience if they hope to pick the right stock before anyone else does.

Indeed, companies with market-caps under the $2 billion small-cap threshold are notoriously difficult to assess by the usual fundamental and technical metrics, but this does not mean that stock-pickers are without recourse. A good place to start, however, can be to follow the smart money, given that financial institutions have, at least in theory, the kind of knowledge and expertise that is not commonly available to the institutional investor.

The following five stocks were selected from the basic materials sector, based on the following criteria:

●     Market-capitalization under $2 billion.

●     High insider ownership: having over 30 percent of shares owned by employees, this is likely a sign that the company believes in itself.

●     Institutional transactions over 20 percent, meaning that the so-called “smart money” has increased its position in the company substantially over the past 3 months.

●     Positive 2014 performance

 

 

New Concept Energy Inc. ($GBR)

Industry: Independent Oil & Gas

Market-Cap / Price: $3.89 million / $2.07

Insider Ownership: 54 percent

Institutional Ownership / 3-Month Increase: 0.10 percent / +100 percent

Year-to-Date Gains: +9.90 percent

 

China Precision Steel Inc. ($CPSL)

Industry: Steel & Iron

Market-Cap / Price: $9.66 million / $3.30

Insider Ownership: 33.40 percent

Institutional Ownership / 3-Month Increase: 1.20 percent / +82.12 percent

Year-to-Date Gains: +81.75 percent

 

China Gengsheng Minerals Inc. ($CHGS)

Industry: Nonmetallic Mineral Mining

Market-Cap / Price: $13.94 million / $0.53

Insider Ownership: 56.87 percent

Institutional Ownership / 3-Month Increase: 0.90 percent / +53.45 percent

Year-to-Date Gains: +147.62 percent

 

Kingold Jewelry Inc. ($KGJI)

Industry: Gold

Market-Cap / Price: $115.16 million / $1.80

Insider Ownership: 45.20 percent

Institutional Ownership / 3-Month Increase: 1.10 percent / +82.07 percent

Year-to-Date Gains: +6.55 percent

 

Chesapeake Granite Wash Trust ($CHKR)

Industry: Oil & Gas Pipelines

Market-Cap / Price: $522.20 million / $11.16

Insider Ownership: 34.50 percent

Institutional Ownership / 3-Month Increase: 7.60 percent / +37.82 percent

Year-to-Date Gains: +11.40 percent

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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