Still on trak a week on Monday?

I've found that it can be frustrating when you're a long term investor in micro-caps, so I've learnt to be very patient over the years. When I first bought Avesco it's market cap. was about £5m and very few investors wanted to know.

Frustrations include. Inertia in the share price for many months. Illiquidity issues. The share prices rise and fall by gut wrenching percentages at times. Incidentally, I've never used stop losses in illiquid micro-caps, I would have been stopped out of all of my eventual multi-baggers otherwise. The constant noise from braggarts, lunatics, chancers, and experts talking shares up or down to suit their own agendas. Just ignore them and follow your own research. Win or lose, you'll only have yourself to congratulate or blame in the end.

My favourite investing book is "One Up On Wall Street" by Peter Lynch. Whilst I wouldn't recommend it for improving your valuation skills, I found it fabulously funny in regards to what to avoid and look for in spotting potential multi-baggers. It certainly resonated with my experiences.

Moving on, I wanted to mention another of my favourite shares which is Trakm8. I've mentioned it many times before since I bought shares in 2011 for prices in the teens. The shares have gone on to multi-bag since and currently stand at about 172p.

The shares have risen close to 400p, but they're as illiquid as Avesco's shares and have indeed followed a similar roller coaster ride. Their fall from the SP highs was partly due to negative comments from a website, alongside liquidity issues. The negative noises are absolute tripe and Trakm8 (like Avesco) has an excellent management team that just gets on with the job. Just for the record, this same website were advising their readers to cash in profits on Avesco in October, as the SP price rose above £3. Oops. It illustrates the wider trait of share tipping services to try and attract punters by boasting that "We've made 180% on Avesco shares aren't we just f***ing wonderful" whilst ignoring (let's say) Stanley Gibbons where they lost investors 97%. Still I suppose they've got to make a living.  If they'd understood Avesco a little better then they'd have advised investors to hang on in there. Never mind. Incidentally, I will no longer refer to the website in question since it's really not worth the time, however it does irk me somewhat when certain individuals cast themselves as some sort of hero when they're more akin to a villain. Anyway, I'll let it go now. Most people usually sort the wheat from the chaff in the end.

Back to Trakm8. The interims will be released a week on Monday, and it's a wonderful little business. I've stated the investment case many times before, and here was my last offering back in April:-

http://michae1mouse.blogspot.co.uk/2016/04/long-term-investing-eventually-pays.html

Since then we've had the final results, and a trading statement:-

The share price came off a little as investors appeared to concentrate on this:-

"Half year profitability is expected to be less than the first half of last year, ...." and the negative impact of recent currency fluctuations.

As a long term investor, I'm encouraged more by this:-

"......a stronger second half anticipated fulfilling the growing orders received in the financial year to date."

and

"Group new orders booked have been received at a rate of 37% greater than the same period last year, of which 27% is organic growth. This continues the trend of strong growth of recent years."

Whilst the company stuck by their predictions for the full year, it is clear that investors are more cautious. This means that if there is bad news on full year expectations with the interims then it's priced in already.

My view is that with a long term view, the company is hugely undervalued. I'm not particularly bothered whether or not they hit expectations this year, as long as they keep growing that order book.

Of course, if they are still on track to hit expectations then the share price will rapidly climb back towards £4.

I'm sure that some investors thought my predictions about Avesco's value were a little ambitious. Of course, I'm happy to report they weren't.

With a medium/long view on Trakm8, I'm looking for £10-£20. In the short term, at the current lowly valuation, they are possibly vulnerable to a bid at around £5.

Monday week will be interesting.

P.S. I was gob-smacked yesterday. Not about the bid for Avesco, although that did take my breath away. It was what I have always assumed to be a traders urban myth. It's actually 100% true. My lips are sealed!!!!!!