It’s worth remembering that the stocks in your portfolio should not depend on hopes and prayers to realize a satisfactory return. This is especially true for microcap stocks, Stockhouse readers’ preferred playing ground, given their higher volatility and generally shakier business prospects, compared with established large-cap names.
A useful way to find new microcap stocks worth investing in is by searching for underlying companies you could imagine yourself holding for the long term.
Gatekeeper Systems
Take Gatekeeper Systems (TSXV:GSI), which provides smart video and data solutions to the transportation industry, including AI, video analytics and data collection.
The company’s holistic offering is designed to maximize rider safety, promote data-driven decisions, and ultimately enhance client profitability, all of which encompass a value proposition the market has responded favorably to. The stock is up by 108 per cent year-over-year and by more than 475 per cent since 2019.
In terms of its balance sheet, Gatekeeper’s scale seems to be just shy of reliable profitability. The company posted net income of C$2.8 million in 2023, up by 50 per cent year-over-year, thanks to growth in its school and transit segments. From a broader perspective, it has posted positive net income in three out of the past five years, and four out of the past five quarters.
With growing revenue, more than 3,500 customers and more than 50,000 active mobile data collection devices, Gatekeeper Systems is playing a meaningful role in ushering essential vehicles into the tech-enabled age.
Its most recent milestone includes a completed C$9 million contract for video and wireless data technology for transit buses and trains under the Southeastern Pennsylvania Transportation Authority. Read the contract announcement here.
Click here to read Gatekeeper System’s latest investor presentation.
Orford Mining
Orford Mining (TSXV:ORM) is another microcap stock with a lot to like, casting skepticism upon its stock’s 55 per cent loss over the past five years.
The company recently announced 12 new exploration targets for lithium, cesium and tantalum-bearing pegmatites, as well as two potential exploration targets for gold, on its Nunavik lithium properties in Quebec. The targets were guided by glacial till sampling, which “has been successful in generating successful exploration targets and making discoveries in the Nunavik region of northern Quebec and globally,” according to a news release.
Exploration in 2024 will follow up on these results, as well as previous pegmatite discoveries, to continue proving out Nunavik’s prospectivity.
Orford diversifies its business across three other strategic properties in Quebec that are no slouches against Nunavik’s clear upside:
- The Qiqavik project, which hosts numerous high-grade gold discoveries
- The Joutel properties, which offer potentially underexplored drill-tested gold zones, in addition to gold-rich till and overburden samples
- The West Raglan property, a 707-square-kilometre land package with nickel, copper and platinum group elements mineralization hosted in ultramafic intrusions that have yielded all known nickel sulphide mineralization in the Cape Smith Belt, including Glencore’s Raglan mine (North Trend) and Canadian Royalties‘ Nunavik nickel mine
When it comes to microcap exploration-stage stocks, Orford’s upside is about as good as it gets, and well worth a more thorough assessment of its place in your portfolio.
Click here to read Orford Mining’s latest investor presentation.
Nextech3D.ai
Our final pick for a microcap stock showing signs of long-term success is Nextech3D.ai (CSE:NTAR), an augmented reality and artificial intelligence (AI) company focused on immersive photorealistic 3D experiences for e-commerce.
The company’s 3D modeling business, Aritize 3D, has produced more than 60,000 AI-generated 3D models for the likes of Amazon, Target and Procter & Gamble, with a full suite of customization options to reach their target audiences. CEO Evan Gappelberg recently spoke with Stockhouse’s Ryan Dhillon about Nextech’s new AI-powered search engine to “speed-up and scale-up” its 3D modeling operations.
According to Precedence Research, the global 3D imaging market (slide 6) will reach US$50.4 billion in 2024 and grow to US$127.4 billion by 2030. While Nextech commands only a C$24 million market capitalization, and is posting mostly net losses, it is growing market share while remaining consistently gross profitable, with revenue for the nine months ended September 2023 growing by 97 per cent year-over-year.
Nextech complements its 3D model business with disruptive AI technologies, which it acquires, develops and spins out to shareholders as public companies, while remaining a significant shareholder. Examples include ARway (CSE:ARWY), a platform that allows clients to optimize any space though interactivity and enhanced navigation tools, in which Nextech retains a 49 per cent stake. Another is Toggle3D.ai (CSE:TGGL), an AI-powered 3D design studio, in which Nextech retains a 44 per cent stake.
Nextech’s other complementary brand is Map D, a virtual and hybrid events service that has delivered more than 3,500 event floorplans on five continents that led to more than C$200 million in booth sales.
Propelled by additional global tailwinds in AI (US$92 billion by 2030), augmented reality and virtual reality (US$859 billion by 2030) and machine learning (US$305 billion by 2030), the company believes it is on track to becoming a major player in its target markets, opening the door for an investment opportunity, contingent on your personal due diligence process, based on the stock’s 71.15 per cent loss year-over-year.
Click here to read Nextech3D.ai’s latest investor presentation.
Join the discussion: Find out what everybody’s saying about these prospective microcap stocks on the Gatekeeper Systems, Orford Mining and Nextech3D.ai Bullboards, and check out Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of Gatekeeper Systems, Orford Mining and Nextech3D.ai, please see full disclaimer here.
