The journey from idea generation to an invest

Part 1: Idea generation

In this new „Investment Strategy“ series of Under-Followed-Stocks, I will write a bit about my generally used investment process. This part will focus on „How do I find new investment ideas?

1/x You can read the full write-up on the forbidden platform. It is completely free, but if you want to support me, you can gift me a subscription :)

linktr.ee/underfolloweds…

For a quick overview I summarize the key aspects below ⬇️

#6 of Under-Followed-Stocks is about B3 Consulting Group $B3.ST

B3.ST in class

▫️19 years of profitable growth
▫️10y Rev. CAGR of 18% & EBIT of 23%
▫️high insider ownership
▫️Revenue grew by 24.5%, EBIT by 95% in '22
▫️LTM EV/EBIT of 12.3x & P/E of 15.9x

1/x You can read the full write-up on my substack. The substack is completely free, but if you want to support me, you can gift me a subscription :)

underfollowedstocks.substack.com/p/b3consulting

For a quick overview I summarized the most interesting parts in the next tweets ⬇️

#5 of Under-Followed-Stocks is about Frequentis $FQT

For a safer world

▫️hidden champion with 30+ years profitable growth
▫️recession & crisis resilient
▫️90% governent customers who subsidize R&D cost
▫️insider ownership of 68%
▫️clean balance sheet
▫️LTM EV/EBIT of 12.8x

1/x You can read the full write-up on my substack. The substack is completely free, but if you want to support me, you can gift me a subscription :)

underfollowedstocks.substack.com/p/5-frequentis…

For a quick overview I summarized the most interesting parts in the next tweets ⬇️

My Investment Criteria

The new issue of my substack is a little different as it‘s more personal. Here is the full write-up about what characteristics I look at when searching a new stock:

underfollowedstocks.substack.com/p/investment-c…

I will summarize some key points in this thread 👇🏻

1/x 1. Small Caps

Why i prefer small caps:

▫️Statistically Small Caps performed better than Large Caps in the past (see Tweet below)
▫️Law of large numbers
▫️No/less institutional investors
▫️easier to get (direct) contact to management

https://twitter.com/mavix_leon/status/1529445402046504961

#3 of Under-Followed-Stocks is about Leatt Corporation $LEAT

The science of thrill

▫️award winning protection gear
▫️98 patents granted or in process
▫️global leader in neck brace market
▫️Mgmt with skin in the game
▫️3Y Rev. CAGR of 37% & net income of 108%
▫️LTM P/E of 8.8 You can read the full write-up on my substack:

underfollowedstocks.substack.com/p/3-leatt-corp…

For a quick overview i summarized the most interesting parts in the next tweets⬇️

2/x

How do small-caps vs. large caps perform during a recession?

I just read 2 interesting studies regarding this topic and i want to share the most interesting parts in this thread👇🏻 The study from L.N. Switzer (2010) is about Canada and US, but i will focus on the US:

I think most of you know, that small caps oupterformed large caps over time. In the 84-year holding period from 1926-2010 the difference amounted to over 2.03% per year.

#2 of Under-Followed-Stocks is about Vow ASA $VOW.OL

Turning waste into gas - The solution for europe‘s energy problems?

▫️patented solution that turns waste & biomass into CO2 neutral energy
▫️Mgmt with skin in the game
▫️NTM Revenue growth of ~100% & EV/EBIT of 23x

1/x You can read the full write-up on my substack:

underfollowedstocks.substack.com/p/2-vow-asa?s=w

For a quick overview i summarized the most interesting parts in the next tweets ⬇️

2/x

The first issue of Under-Followed-Stocks is about the Headhunter Group $HHR

▫️#1 online recruitment platform in the CIS region
▫️underpenetrated & fast-growing market
▫️powerful network effect
▫️Revenue growth of 103 % at 60% Margins valued TTM P/E of

1/x You can read the full write-up on my substack:

underfollowedstocks.substack.com/p/headhunter?r…

But for a quicker overview i summarized the most interesting parts in the next tweets 🤗

2/x

Portfolio Performance 2021 (TTWROR)

📈 Stocks Portfolio +34.25 %

💲Crypto Portfolio +370.57 %

Winner (stocks)

🥇 $FUTU +142 % (sold)
🥈 $EPSIL +127 %
🥉 $LORL +92 % (sold)

Loser (stocks)

🥇 $BABA -42 %
🥈 $KAMBI -40 %
🥉 $APX -37 % (sold)

crypto winner & loser ⬇️ Winner (crypto)

🥇 $ETH +454 %
🥈 $IOTA +426 %
🥉 $BTC +90 %

Loser (crypto)

🥇 $YGG -15 %
🥈 $DOT +21 %
🥉 $XRP +28 % (sold)

Some thoughts about my performance and my strategy in the next year ⬇️

Steico - The green share $ST5.DE 🍀

▫️European market leader for ecological wood fibre insulation
▫️the climate debate and numerous subsidy programmes make insulating and building with wood more attractive than ever
▫️Founder-led (owns 61%)
▫️9m '21 EBIT +104.9 %
▫️ESG

1/x👇🏻 Company overview

▫️develops, produces & markets ecological construction products made of renewable raw materials
▫️only manufacturer in the industry to offer an integrated wooden construction system in which insulation material & construction components supplement each other

I just had some time to have a closer look at the Q3 results of $KSPI and these numbers are from another world 🤯

These are „just“ the financial highlights. Tremendous growth in every segment. In their presentation we also get some further impressive figures

(1/x) 👇🏻 ▫️the faster growing and higher margin Payments and Marketplace Platforms accounted for 50 % of net income vs 34 % yoy
▫️dependency of the fintech platform decreases

Draw 😅

As a growth investor a big part of my daily thoughts is:

„How will the future look like“

This is an essential part of my investment process. When you can imagine a „future world“ in 5, 10, 20 years you can deduce possible secular growth trends from this imagination ⬇️

https://twitter.com/mavix_leon/status/1435116438386262016

But this imagination has to meet with reality. It should not reflect what you wish how the future will look like. It should express a realistic version of the future based on facts, statistics and current developments.
That‘s why it‘s not only important to read investment books,

Media and Games @MGI_SE $M8G

▫️leading european games and digital media powerhouse serving customers worldwide
▫️high synergies between advertising & gaming business results in good organic growth + prudent M&A
▫️Revenue CAGR of 78% since 2018
▫️CEO with skin in the game
⬇️ MGI‘s unique strategy

1️⃣ Buy, integrate, build & improve

2️⃣ Combining Games & Media

3️⃣ Profitable organic & M&A Growth

$NUMND Nordic Unmanned today gave some more information about the development of their core markets and how they want to reach their goal of 4 billion NOK in revenue in 2025.

⬇️ 4 factors driving the growth

▫️Environmental footprint
▫️technological capabilities
▫️Economics
▫️Regulations

Epsilon Net Group $EPSIL 🇬🇷

▫️rapidly growing group that has been a benchmark in software development for >20 years
▫️Greek market leader in accounting office, HR & Payroll system market
▫️65 % owned by Founder & CEO
▫️110 % growth in Q1
▫️low valuation & profitable

Thread ⬇️ Business Overview

Epsilon Net‘s activities are categorized in 3 Business Units:

1. Epsilon Net Software (software applications & database dev)

2. Epsilon Net Network (accounting & labor portal & subscr. based consulting)

3. Epsilon Net Training (vocational training programs)

InPost

$INPST is Poland’s leading E-Commerce Enablement platform providing APM (Automated-Parcel-Machines) & to-door delivery services and fulfillment.

InPost is rapidly growing, doubling their revenues and expanding internationally with strong profitable margins

A Thread ⬇️ Business Overview

▫️>13k APMs
▫️e-commerce focus
▫️founder-led with skin in the game
▫️98% of parcels delivered within 24 hours in Poland
▫️>28k merchants integrated like Allegro (Polands biggest e-com merchant), Amazon, AliExpress
▫️5.7m active app user
▫️5 ⭐️ rated app

Nordic Unmanned $NUMND 🛸

▫️European leader of unmanned systems
▫️high-end drone services to European governments & solid industrial clients
▫️recurring rev. with long-term frame agreements
▫️expected revenue growth of 200 % for first half of 2021
▫️positive EBITDA in '20

1/x Drone market 🛸

▫️expected to grow to $44b by '25 from $22b in '20
▫️largest revenue segment is expected to be services, where NU is operating
▫️Drones are alternatives to legacy solutions which reduces time, costs & CO2 emissions while incr. safety & enhancing data analytics

In these tweets i already made some assumptions why i think that the business development of $AMZN in the early years is in some kind of comparable to the present development of $U
I kept thinking about this and the book „100 Baggers“ by Christopher Mayer came to my mind
⬇️
1/x

https://twitter.com/mavix_leon/status/1367510798973689857

The book is about how to find stocks that return 100-to-1 and there‘s also a chapter about $AMZN and the question you could have come up with a sound argument to buy $AMZN based on fundamentals before it became a 100-bagger.

Neogames $NGMS 🎰🎰🎰

🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥
▫️SaaS provider of iLottery solutions
▫️70 % market share in US
▫️highly scalable & high margins
▫️profitable
▫️sticky business
▫️huge potential for further growth
▫️undervalued
🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥

A thread 1/x ⬇️ Business Overview

▫️ $NGMS has multi-year contracts with state lotteries to develop and manage their iLottery program
▫️Revenues calculated as a % of gross gaming revenue (GGR) or net gaming revenue (NGR) generated via iLottery platform
▫️ 360 degree iLottery solutions

@Mindbreeze (76 % owned by $FAA @Fabasoft) is recognized as a Leader and positioned highest for Ability to Execute in the @Gartner_inc Magic Quadrant for Insight Engines 2021.

💸I think the 76 % share owned by publicly listed $FAA is pretty undervalued.

Why? A Thread

👇🏻 1/x ▫️$ESTC is also mentioned in the Gartner quadrant
▫️$ESTC is currently valued at an EV/S multiple of ~ 16 and ist unprofitable on an EBITDA basis
▫️@Mindbreeze is a much smaller company but if this multiple would be applied for them their value would be ~ 248m €

2/x

The first company that came to my mind when i saw this was: $U

▫️customer experience > earnings
▫️growing customer base > earnings
▫️continuous development of the main product to expand in other markets
▫️build an ecosystem around the main product

1/

https://twitter.com/BrianFeroldi/status/1367464963024052225

▫️focus on not giving the customer a reason to leave the ecosystem

—> like Amazon Prime the Create Solutions of Unity are just a lure for the cusomter to enter the ecosystem. Once content created with unity it is more likely that the creator will also use another value added 2/