Over the years, the GSPC Group has emerged as the only Oil & Gas conglomerate to be promoted by a state government of India and has been successful in fulfilling the endeavor envisaged by the Government of Gujarat. It was re-incorporated as Gujarat State Petroleum Corporation Limited in 1994 in order to establish a strong foothold in the entire hydrocarbon value chain. The company Revenue has grown by 63% in each year for the last five years and the company has a turnover of Rs 12,244 Cr in the year 2020. There is nothing that makes me believe that smaller companies are not in a position to grow their earnings per share more quickly than large companies over the coming years.Gujarat State Petrochemicals Corporation Limited was incorporated by Government of Gujarat in 1979.
Markets are volatile right now, but investors can buy high-quality small and mid-cap names with great prospects at an attractive share price. This is quite material over a number of years, especially when compounded.
Over the past 66 years, listed smaller companies have beaten larger businesses by 3.4 percentage points per year. Why should investors consider owning micro-cap stocks now?
There has been an indiscriminate sell-off, which has presented us with the chance to buy more of the high-quality micro-cap names we like. They have moved out of areas like technology, where there are quite a lot of micro-cap names in Britain. The general view from investors is to favour “safer” large-cap names they’re more familiar with.Īlso, a lot of investors have moved into cyclical sectors such as commodities and banks, where you tend to find large companies. They are less well known and researched, so people are less comfortable owning them when they’re worried about other things. When markets are worried about the economy, it gets amplified in the share prices of smaller companies. Why have smaller stocks struggled so much? If a company runs into trouble, the overall effect on our investors’ savings should be limited. We do a lot of research but we don’t get everything right all of the time. The vast majority account for less than 2pc of assets each. To help manage the risk and stop one stock doing huge damage our portfolio, we have 180 companies in the fund. Smaller companies can offer big returns to early investors – but if they run into problems, their share prices can plummet. If the customer has limited alternatives, it gives the company pricing power and that can provide a degree of protection in more challenging economic conditions. We like niche companies where there are few, if any, other businesses offering a similar product or service. There are always new and interesting companies coming on to our radar.įewer fund managers and analysts cover smaller companies, so by doing our own research we have an opportunity to identify businesses with the potential to grow before others do. One of the attractions of investing in smaller companies is the sheer number of opportunities. He adds that the recent stock market sell-off has created a “rare opportunity” to buy Britain’s smallest companies at a discount. Yet in spite of a challenging 12 months, he says most stocks in his portfolio are profitable and over time their strong potential will receive the recognition it deserves from investors. Mr Feld has been co-managing the fund for more than 10 years, while Mr Santa Barbara came in last year as veteran stock picker Giles Hargreaves stepped down. His £1.3bn fund, which he runs alongside Guy Feld, has lost 19pc over the past year, compared with a 14pc loss by rivals. This is something that Eustace Santa Barbara, co-manager of the Marlborough UK Micro-Cap Growth fund, is all too aware of. They had been prized for the promise of future earnings but now higher interest rates have diminished the value of those profits. It has not been an easy time for investors in Britain’s smallest listed companies, known as “micro-caps”, particularly those classified as “growth” stocks.Īs central banks have raised interest rates to tackle inflation, investors have had to re-evaluate the prospects of fast-growing companies. ‘Markets are choppy – but small stocks will always come out on top’įund of the Week: Marlborough UK Micro-Cap Growth manager on why huge falls in the shares of nascent British firms isn't a problem
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