My Largest Small Cap Holding

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If you asked my wife or my employees what kind of investor I am, they'd probably tell you that I'm a growth-oriented value investor.

I made my bones as an analyst over the past 12 years by focusing on small-cap companies for that very reason; I enjoy doing in-depth research of undiscovered, small companies with the potential for significant capital gains.

My research focuses on uncovering great growth companies at attractive prices. Typically, this is pretty hard to do. After all, once a company is well known to be a "growth stock", then investors pile in and the stock's valuation soars.


But my goal is to never buy a "growth stock" after it's well known. As you probably realize, when you buy these types of companies ahead of the crowd, you have an excellent chance of doubling or tripling your money in a very short period of time.

***The potential for finding a 10 bagger - a stock that goes up over 1,000 percent - isn't outside the realm of possibilities. My best stock recommendation ever was for True Religion ( TRLG ) , a denim retailer stock that returned 2,218% to subscribers of my Small Cap Investor Pro service in just over four years.

That's more than 22 times your money - and it turned every $5,000 invested into over $110,000.

You don't need more than a few of these kinds of winners to build a substantial fortune that can fund your retirement, pay for that vacation home, or put your kids through college.

Today, the single largest stock holding in my personal investment account is a small cap company that few investors have ever heard of. No surprises there.

But you might be surprised to learn that it's a silver company.

Typically, you might think of silver companies as having depreciating assets - in that the longer they're in business, the less silver they have in the ground and the less their asset is worth.

And that's the case for many publicly traded silver companies.

But in the specific case of small cap silver companies in the early stages of exploration and development - it's a completely different story.

Many of these companies - like all of my favorite small caps - are largely ignored or undiscovered by institutional investors and analysts. That's because they don't yet have any significant production. And therefore have minimal revenues, and almost never any earnings. They're extremely difficult to value when they're this small.

And in some cases, they're literally months away from incredible profitability as they bring their production on line.

That's when institutions and analysts pile into these companies. And that's when early investors can become incredibly rich as the crowd discovers the stock.

***Today, my largest stock holding is a tiny silver company that's still many months away from producing a single ounce of silver. But that's exactly why I've been accumulating a sizable position in the stock right now.

At $37 an ounce silver, the company has an estimated $2.3 billion of the metal sitting in the ground. But this company has a market cap of under $400 million. So buying shares of this company today is like buying the silver in the ground for about $5.50 an ounce. It's truly an astounding reserve - what's been called the biggest silver discovery in more than a decade!

Even if silver prices drop to $30 an ounce, this company will be incredibly profitable over the coming years as its mine starts to bring silver to market. With a projected cash-cost of less than $6 an ounce when a mine is built silver prices could go in the toilet and this company's bottom line would still be fine. With that kind of downside protection, it's tough to lose.

These types of opportunities only come around about once a decade. So when I find a company with this type of resource, I start digging.

I've been recommending shares of this small cap silver company to subscribers of my Small Cap Investor PRO newsletter for many months. And in my personal investment account, I've built up a sizeable position. In fact, this stock is my biggest single stock holding in my investment portfolio.

I've worked very closely with my small cap research analyst Tyler Laundon, as well as Kevin McElroy, our resource editor, to put together an exclusive report on this opportunity.

I invite you to get a copy of my complete research report, titled Sierra Madre Silver Profits . Inside this special report, you'll get my in-depth research into silver mining in Mexico, and find my full report on this small cap gem that could see its shares soar in the coming months.

Claim your copy of Sierra Madre Silver Profits and try my Small Cap Investor PRO service by clicking here now.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: TRLG

Wyatt Investment Research

Wyatt Investment Research

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