The Rules of Investing Chris Prunty: The 4 small caps heading for ‘Hall of Fame’ status
Nov 7, 2025
Chris Prunty, Principal and Portfolio Manager at QVG Capital, dives into the qualities that elevate companies to greatness. He reveals three key traits shared by Australia’s elite stocks and names four promising small caps: Hub24, Supply Networks, Aussie Broadband, and MA Financial. Chris explains why Hub24 outshines Netwealth, focusing on margins and customer integration. He shares insights on inflation's impact on the market, and how hiring intentions signal growth potential. Join him for a deep dive into the bright future of small-cap investing!
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Three-To-Five Year Cashflow Lens
- QVG focuses on cash flow and forecasts businesses over a three-to-five year horizon to value investments.
- They prioritise profitability and predictability, which narrows their investible universe dramatically.
Small Cap Strength From Rate Hopes And Rotation
- Small caps performed strongly this year partly due to market expectations of rate cuts and rotation from large-cap disappointments.
- Performance also reflected flows into smaller growth names as some large growth stocks stalled.
Muted Hiring Signals Tepid Revenue Demand
- Private sector hiring intentions have been muted, signalling restrained cost expansion and softer demand.
- Many companies have driven recent earnings via margin management rather than sustainable revenue growth.