The Intrinsic Value Podcast - The Investor’s Podcast Network

MI290: Untapped Value: Unearthing Undiscovered Stocks w/ Paul Andreola

Sep 5, 2023

Paul Andreola, a successful investor, shares his discovery system for microcap stocks, focusing on undiscovered Canadian businesses. Topics include the importance of holding onto winners, the discovery process, financing, and identifying inflection points. They also discuss manual filings analysis, evaluating businesses based on earnings and competitive advantages, the growing interest in nano caps and micro caps, institutional investor interest and risks, concentrated investing, and the concept of averaging up investing.

58:29

Episode guests

Paul Andreola

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Episode notes

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Quick takeaways

Holding onto winning stocks is crucial for portfolio growth and performance, comparable to keeping a star player on an ice hockey team.

Specializing in a specific sector and conducting in-depth research in the Canadian market allows for the discovery of undervalued and undiscovered businesses.

Understanding the discovery process provides a significant edge in identifying companies before they gain broader market attention, leading to potential outsized returns.

Deep dives

The Importance of Holding Onto Winners

The speaker emphasizes the significance of holding onto your winners, using the example of a company, Expell, that experienced rapid growth and increased in value. He believes in not trimming a position simply because it becomes a large percentage of your portfolio. Instead, he suggests keeping winners in your lineup as long as they continue to perform, similar to having a star player on an ice hockey team. Only when a winner starts to lose its edge does it make sense to reduce the position.

Introduction

2min

Investing in Undiscovered Small Cap Businesses in Canada

10min

The Advantage of Manual Filings Analysis

3min

Analyzing Short-Term Tailwinds and Longevity of Trends in Evaluating Businesses

2min

Growing Interest in Nano Caps and Micro Caps Among Retail Investors

5min

Institutional Investor Interest and Risks in Microcap Investing

15min

Approach to Concentrated Investing and Evaluating Performance

5min

Averaging Up Investing: Lessons Learned and Margin of Safety

21min

Kyle Grieve chats with Paul Andreola about his discovery investing system for microcrap stocks, why focusing on undiscovered businesses is so powerful, his approach to discovering undervalued stocks, why holding onto your winners is so important, and much, much more!

Paul Andreola is a successful investor, board member, and investing speaker. He invests in undiscovered Canadian small cap businesses and shares his ideas with his private community and on Twitter.

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro.

01:58 - How the discovery process works.

11:46 - Why Canada’s filing system SEDAR helps keep businesses undiscovered.

16:12 - Why microcaps offer significant value.

26:52 - The importance of financing in the discovery process.

30:14 - How share price can be used to identify inflection points.

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Paul’s Small Cap Discoveries.
What Works On Wall Street by James O'Shaughnessy.
How To Make Money In Stocks by William O'Neil.

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