There’re often interesting stories in the companies right at the bottom end of AIM. Some of them are decidedly dodgy – Zambian mining stocks and deep-sea oil exploration companies that were taken for a ride for a while before getting unceremoniously dumped, for instance. As you probably tell from the examples I picked, there’s a lot of tar-brushing going on here. Paradoxically for a value investor, that means there’s value – because the places you find really interesting companies are often in places where other people don’t want to look.
Anyway, yesterday I was browsing through Investing Sidekick when I found his half-yearly review and something caught my eye – a 30% allocation to one stock? I consider myself a pretty concentrated chap – I’m aiming for maybe 8-10 holdings in my personal account, so 30% seems a rather strong signal of confidence. What’s the deal?
To grandly tie my opening two paragraphs together like a wizened old storyteller, I’ll tell you what I found – a rather interesting micro-cap AIM stock called Craven House Capital. Their website is full of the sort of value rhetoric we love to hear: