Three Small Caps With Big Potential - Roland Houghton | Milford

Navigating the sea of opportunities in Australian small caps is always a challenge. While the Australian Small Ordinaries index has averaged 6% p.a. for the past 10 years, there have been some huge winners that have emerged from the sea of unprofitable companies, mining explorers and companies trying to figure it out. Today we are joined by Roland Houghton, Co-Portfolio Manager of the Milford Dynamic Small Companies Fund, to help us understand how to find winners in the smaller part of the market. In today's episode of Basis Points we unpack: • Roland's investment philosophy and criteria • How the process starts with idea generation • Then what the Milford team are looking for as they research these ideas • How Milford combine the bottom-up and top-down when building a thesis • What Milford's macro models are telling us at the moment • Then we bring to life with a deep dive into 3 stocks in Roland's Dynamic Small Companies fund 00:00 Introduction 01:54 Meet Roland and the Fund 02:49 Milford’s Investment Philosophy 04:17 Practical Fund Management Tactics 05:26 Navigating Macro Noise 07:06 US Fiscal Concerns and Macro Risks 09:49 Outlook for Aussie Small Caps 11:28 Stock Discovery Process 13:08 What They Look for in a Stock 14:44 Life360: Investment Thesis 18:11 Life360: Risks and Competitive Landscape 23:01 Tuas: Disrupting Singapore Telco 27:43 Tuas: Growth Metrics and Risks 32:59 Ridley Corporation: Agri-Business Pick 36:24 Ridley: Challenges and Conviction 40:39 What Makes a Dynamic Small Cap? 41:56 Outro and Final Thoughts ---------- CPD Points: This episode is accredited for CPD points by the Financial Advice Association of Australia (FAAA). To claim your points, complete the CPD Quiz (https://equitymates.com/episode/basis...) and we'll send you your certificate. ---------- Thank you to Milford (https://milfordasset.com.au/)for sponsoring this episode of Basis Points, and helping us keep all of our content free. If you want to learn more about Milford's range of funds, including Roland's Dynamic Small Companies Fund, visit their website (https://milfordasset.com.au/milford-f.... ——— Want more Basis Points? Sign up to the Basis Points Newsletter here: https://basispoints.beehiiv.com/subsc... Follow Basis Points on LinkedIn:   / basis-points-by-equity-mates   Have a question? Send us a message on our website (https://equitymates.com/get-in-touch/) ——— This episode has been sponsored by Milford. 'Milford’ in this podcast refers to Milford Australia Pty Ltd ABN 65 169 262 971 (AFSL 461253), which was formerly known as Milford Asset Management in Australia. If you’d like to find out more about what Milford can do for your clients, check out milfordasset.com.au. To learn more and before you invest, be sure to read the Milford Funds Product Disclosure Statements and Target Market Determinations at milfordasset.com.au Thank you to Milford for helping us keep all of our content free and accessible. ——— Basis Points is a product of Equity Mates Media. This podcast is intended for education and entertainment purposes. Any advice is general advice only, and has not taken into account your personal financial circumstances, needs or objectives. Before acting on general advice, you should consider if it is relevant to your needs and read the relevant Product Disclosure Statement. And if you are unsure, please speak to a financial professional. Equity Mates Media operates under Australian Financial Services Licence 540697.