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Why you should research small companies: IGas has made me a small fortune

igasenergyEarlier this year I tipped IGas Energy. I researched the shale situation in the UK, thought that IGas was ideally placed to benefit from shale gas exploration. I thought the shares were seriously undervalued. So I bought some at 68p.

That was April. They’ve rocketed to 129p each now.

How was this possible? I did some thorough research into a small company, that many other people hadn’t. I capitalised on information in the public domain. And profited.

The thing is, most attention in the stock market revolves around FTSE100 companies. Blue chip companies. There’s hundreds of analysts, researchers and looking into these firms.

So the opportunity to catch a big rise is unlikely. Most of the information is factored into the price, and is known by everyone.

But with small firms, AIM listed companies, opportunities are rife. Institutional investors don’t invest in small companies. Nor do they research them. So share prices don’t always reflect their true value.

So that’s where the opportunity for small investors like myself come in.

Do your research into small companies. Then buy if they seem undervalued. Boom. Profit all round.

 
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Posted by on January 1, 2013 in Trading Ideas

 

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