We Study Billionaires - The Investor’s Podcast Network TIP257: Small Cap Investing - w/ Eric Cinnamond
Aug 25, 2019
In this engaging discussion, Eric Cinnamond, a seasoned portfolio manager with over 20 years in small-cap investing, shares insights on valuing companies like Natural Gas Services, Gencore Industries, and Crimson Wine Group. He delves into the cyclical nature of the natural gas market and the significance of balance sheets for small caps. Eric also discusses investment risks and strategies, emphasizing the importance of intrinsic value and position sizing in your portfolio. Expect valuable advice for navigating the small-cap landscape!
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Natural Gas Services Valuation
- Natural Gas Services ($NGS) is an energy infrastructure company tied to the cyclical energy industry.
- Consider an asset valuation approach due to its current low earnings and strong balance sheet.
Identifying Cyclical Troughs
- Analyze historical rig counts to identify cyclical troughs in the energy industry.
- Favor energy service companies with strong balance sheets for navigating downturns.
Natural Gas Industry Dynamics
- Natural gas prices are currently very low, impacting energy companies' profitability.
- However, the disciplined CapEx spending and growing demand suggest potential future upside.