Summary
- In all our years of microcap investing, we have seen some very unique special situations that have offered unparalleled opportunities through an investment in obscure, undiscovered companies with a promising future.
- Generally speaking, many microcap companies lack genuine appeal, and real staying power, due to a plethora of issues which tend to plague this highly-speculative investment sector.
- These often include an unattractive capital structure, toxic debt, highly incompetent management, little or no revenues, poor products, balance sheet problems, corporate governance issues, lack of financial transparency and others.
- The microcap graveyard is littered with flash-in-the-pan, over-hyped, businesses that were destined to fail from the very beginning, but yet managed to pick the pockets of naïve investors before disappearing.
- When a company comes along that breaks the traditional mold of Micro-cap mediocrity, it presents investors with an unusual occasion to get in on the ground floor, before the company becomes widely recognized.
We have been working on this article with the Seeking Alpha editorial staff to attempt to encapsulate our ideas in a succinct way; so as not to make it the 2021 equivalent of Tolstoy's "War & Peace".
We understand that readers want an article that gets to the point, presents information in an orderly and logical manner, while, at the same time, creating a sense of curiosity to explore the idea even further on their own.
To do that with our latest microcap idea was a bit of a challenge.
We stated in one of our earlier articles that when it comes to researching opportunities in the microcap space, more information is always better than less information.
Our goal, with this particular article, has been to present investors with as much high level, critical information as we could, while maintaining a reasonable word count.
At the same time, we decided to provide a more detailed analysis, on our blog page, for those inclined to dig deeper into our thesis, and to help enhance the performance of their own due diligence.
With that, we present our #1 best microcap idea for 2021; Blue Biofuels, formerly Alliance Bioenergy Plus (OTCPK:ALLM).
We rate the shares as a strong buy for long-term speculative accounts, willing to accept the inherent risks of microcap investing.
Investors should only consider investing in ALLM if they are willing to accept the inherent risks of microcap investing; which include, but are not limited to, trading outside of a listed exchange, potential liquidity issues, dealing with penny-stock rules, lack of margin eligibility, a possible absence of transparency regarding BBBO quotes, a limited number of Market Makers willing to provide depth to the order book, potential issues regarding financing activities, inadequate capital to execute on the company's business plan, going concern caveats, and the potential inability to compete with larger companies due to limited financial and personnel resources.
