Investment Thesis
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Legendry American Investor, philanthropist and business tycoon Warren Buffet said “Price is what you pay, value is what you get”. He stressed on how one can make extraordinary returns only if there is a gap in Price and Value. Markets are always young and give you an opportunity to identify companies that you can invest into make excessive returns. Thus, understanding “Value” is a prime importance in any investment decision.
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Business Valuation helps us in understanding what value drivers are built in the current market price of the stock, for example, growth rate, margins, investment rate, risk levels etc. This helps us understand the probability of the company delivering the numbers and will also help us analyze what the market be ignoring.
Small Cap Investment Thesis Template: RAAS Capital Approach
Investing in small cap companies can be attractive for several reasons, and constructing an investment thesis for such investments involves considering various factors. Here's a template for a small cap investment thesis that RAAS Capital Research Analysts follows.