Valuation of Micro Caps, Small Caps Stocks

Some things to consider to filter out the good small caps or micro caps stocks.


1. Proven management team. Look for leaders with track record in other companies


2. Strong industry dynamics. Look for competitors, barriers of entry, power of suppliers.


3. Funds for key milestones. It is ok to dilute shares for startups - it is better that they get more funding when they need it to develop the product, rather than go bankrupt.

4. Strong news flow pipelines 


5. Management incentives. Look for rewards in form of stocks or options for management.

News: Small Caps, Biotechs, Rare Earths, ETFs

Quite a few articles on today's news about Small Caps, speculative and alternative investments.

Highlights a couple of takeover, acquisitions or collaboration of Australian biotechs by giant foreign pharmaceuticals. Notable ones include Acrux, Chemgenex, Mesoblast, Biota and Cellestis.
Life-science battlers have a spring in their step


This article talks about a few small caps funds and the fact that it is getting harder to choose a winning small cap. Also provides a historical view of small caps that have become huge successes, like Cochlear, Super Cheap Auto and The Reject Shop.
Small-caps scarce but worth wait: a lack of floats has tightened the market


Highlights a few highly speculative mining stocks. Miners include those with Australian as well as foreign operations, like in Africa.
Mining stocks flying under the radar


Introduces a new rare earths company called Data Motion, which used to be an IT company.
Rare earths worth a shot for IT minnow


Finally an article on ETF which has gained worldwide popularity among investors. This article however, cautions about ETFs. In particular synthetic ETFs carry much more risk since they are based on derivative and leveraged products, rather than just mirroring the index.
Exchange traded funds under global scrutiny