I was just visiting a new prospect today and came away totally excited and anxious to own this Company. Now I have to admit that I really love finding $1-$5 gems that are either undiscovered or virtually undiscovered.  It’s what I / We do at Genesis Select. What impressed me so much about this Company was the depth and breadth of management, which turned a relatively simple idea into a multi-hundred million dollar business. It did so as a result of their laser focus on execution. Let’s call this company CC. CC had found a niche, in a multi-billion dollar industry. They are exploiting an opportunity, afforded by e-commerce that puts the pure play brick and mortar competitors at a major competitive pricing disadvantage which they are exploiting.

In my presentation to management, describing what we do, our meeting was interrupted by ” The Daily Stand Up”.  All product, department and channel heads gave a 15-20 second rundown of the previous day totals, about 12 in all and the meeting lasted 5 minutes. The sense of pride and ownership was apparent. Each team member knew what their peers data points were relevant to their metrics and management listened and asked but one question. The sense of teamwork was never so prevalent.  I was WOWED! The production and fulfillment tour was equally impressive as they had recruited the top talent from a competitor in with expertise in that vertical. The sole focus of this Company is the customer experience which includes everything from pricing to timely fulfillment.

So what WOWED me? I felt this Company was the embodiment of MIME and all of the traits were present. Management, Idea, Money and Execution and it doesn’t hurt to have a macro trend as a tailwind…..curious, who it is, many readers of this blog are already customers of the trend and if you aren’t yet, you will be shortly.

Stay Tuned.

Everyone fumbles, misses the hand-off, drops the ball even though they gave it their best shot. Sometimes everything you got just isn’t enough. It may be your fault, it may be a macro trend, it may be a bad snap (timing), but the real star managements know that punting is actually part of the game. You punt because it is the best of your options, never your only option.

What I have found over the years are the managements that know when they need to punt and do so, are far better off than those who attempt a Statue of Liberty ruse and hope it goes unnoticed by the fans.  The fans, shareholders and analysts are smart. They hate excuses; we all know what they’re like……they hate the attempt to bury the issues, they want to invest in a management team that clearly defines the opportunities and risks. Punting is an identifiable risk.

Most problems can be solved over a period of time, and if a management is upfront; most shareholders will give a good management team a second shot. In the world of small and micro cap investing, no one has flawless execution, for that matter the same applies in mid and large cap. The only difference is available liquidity, but in micro-cap investing getting out in a meaningful way is just as difficult as getting in especially in liquidity challenged names. So why do investors and analysts invest in these names? Because finding home runs in the big leagues is a bigger challenge than in the minors. A forthright management will explain what could go right, how it could go wrong and in what situation they would look at punting as the best option.  As long as investors have been clearly informed and understand the risk / reward scenario, they know that not every product, service, or idea is a touchdown and sometimes a management just has to punt.