Good Morning Peeps,
Just for the sake of conversation, here is how I look at companies in the micro-cap groups. Investors should not hold high standards to these companies like they would with large caps, they are way too different in the way the act. Apples to oranges if you will.
Take these three statements into account:
1) The first requirement of the Cornerstone Growth Strategy is that the company has a market capitalization of at least $150 million. This will screen out the companies that are too illiquid for most investors, but still include a small growth company. SUNW, with a market cap of $32 million. [editors note:$32M is old data, its now $86.4M]
2) The investor must select companies of "adequate size". This includes companies with annual sales greater than $340 million. SUNW's sales of $86.4 million, based on trailing 12 month sales does not qualify.
3) Companies with sales less than $500 million should be chosen. It is among these small-cap stocks that investors can find "an uncut gem", ones that institutions won't be able to buy yet. SUNW's sales of $86.4 million based on trailing 12 month sales, are fine, making this company one such "prospective gem".
{taken from the NASDAQ site I like to quote so much}
All three statements deal with market cap. Sometimes people here complain that the outside world of investors isn't showing any interest with SUNW. Statement 3 clearly states that institutions wont be able to buy because SUNW does not meet their standards for their fund since the market cap is so small. SUNW is a small company, not a bad one.
How does SUNW fix this? Simply by selling more product and making more sales. Since I have been an investor here, SUNW has gone from $0 in sales to the $86.4M mentioned. If all goes to plan this number will keep increasing. When we start reaching $150M - $300M in sales (and dig ourselves out of micro-cap land) then the outside world of investors will start to notice. We will suddenly start meeting their criterias. But until then, we live in the shadows.
My point is don't hold SUNW to the same standards as you would with other companies unless they are apples to apples.
And if you are long on SUNW then hope for an increase in sales, year over year. Get this to happen (profits wont hurt either) and things will start falling in to place.
“We are like farmers chopping down the fence for fuel when we should be using Nature's inexhaustible sources of energy. I'd put my money on the sun. I hope we don't have to wait until oil and coal run out before we tackle that”. — Thomas Edison
