New year stock cleanout
Recommendation
Retail investors boast two great advantages. One, you can exercise extreme patience to produce high long term returns without penalty; the other is that you can buy any stock listed on the market without restriction. Just because any stock can be bought doesn’t mean it should.
Small stocks present specific problems. They are often illiquid, making getting in and out of positions hard. They can find access to finance difficult simply because their size restricts the potential pool of lenders and equity buyers; and they are often in their infancy as businesses, meaning they are risky. For all those reasons, and particularly due to concerns about liquidity, we generally don’t cover stocks with market caps below $100m. With that in mind we're cleaning out some tiny resources stocks from our coverage universe.
Ramelius Resources was mentioned in AU, check out this gold portfolio as a high risk play on the gold price. While our selected stocks have performed reasonably well as a group, Ramelius has struggled, raising capital at a steep discount to buy a new asset. The purchase could well invigorate the miner and, to those confident doing their own research this may yet be interesting, but we will no longer spend research time on it. In a similar situation are Discovery Metals, Mirabella Nickel, and Rex Minerals. On these stocks, we’re CEASING COVERAGE.