Sometimes no-brainers comes in small sizes

by | Apr 29, 2020 | General | 0 comments

I love small cap or microcap stocks. They are easy to study and understand. Very few people follow them. Analysts are not there to distract you. You can buy them slowly without anyone noticing and then eventually, you can make a lot of money when your thesis plays out.

Today, I want to talk about Oroco Resource Corp (TSXV: OCO) and Dover Motorsports (DVD). Even though I have been writing about the oil tankers lately, Oroco is by far my largest position. From 2017 to 2020, Oroco has been pretty much the only company that I wrote about on my blog. I don’t want to talk too much about it now because you can simply search my website and find all my articles.

I want to spend more time on Dover Motorsports today. This company is an unbelievable no-brainer. With other companies, you have to worry about how the economy is going to recover, and etc. With Dover Motorsports, I feel like the investment success is pretty much in the bag.

The company hosts two major NASCAR events. One takes place in May (supposed to be rescheduled) and the other one in October. You might think, “NASCAR, are you crazy? Who is going to go to the race when Coronavirus is not dealt with.”

The crazy thing is that nobody has to go to the race. Dover Motorsports generates 75 percent of revenues from broadcasting. So all we need is a bunch of guys driving around in circles while being video recorded. At the same time, fans who are not allowed to watch this action live, can stay at home drinking bear and eating chip while skyrocketing the TV ratings.

When I wrote about Dover in my new book, How to Profit from the Coronavirus Recession, I did not own the shares. After reading my own book, I convinced myself to buy it. How can I not buy an easy 50 to 80 percent return. It would be silly.

I have two more books that I will be publishing soon. One is How to Value a Stock and the other one is Microcap Investor. So keep your eye open for them.

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About Mariusz Skonieczny

Mariusz Skonieczny is the founder of Classic Value Investors.