To SPAC Or Not To SPAC? SPACs Are A Fad With An Ending Near In Sight
Deep Value, Long/Short Equity
Seeking Alpha Analyst Since 2009
Additionally, he is a Seeking Alpha Author with one of the highest Followers per Article (F/A) rates. His F/A rate in Seeking Alpha far exceeds 30 followers per article. Also, he has created a big community of deep value investors and launched "Value Investor's Stock Club" (VISC) on Seeking Alpha in 2016. VISC is a value research service with select long and short ideas from different sectors.
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After 30+ years of investing experience, Value Digger has formulated a deep understanding of valuation analysis and his investment philosophy is firmly grounded in Ben Graham-style value-oriented opportunities that often have an asymmetric risk/reward profile. On that front, he has created a proprietary database with thousands of publicly-traded companies, which helps him discover big disconnects, spot the bargains (long ideas) and the bubbles (short ideas) before many investors find them.
Summary
- Value Digger who has a track record of market outperformance avoids SPACs.
- Value Digger hunts primarily for small-cap stocks with the potential to return 3X over a 3-year period, uncovering the next wave of businesses that will be the next mid-cap stocks.
- In other words, Value Digger unearths multibagger stocks for investors with at least one year investment horizon.
- Take advantage of the 2-week free trial to see the outsized gains and why "Value Investor's Stock Club" is one of the most-subscribed services for value investors since 2016.
Total SPAC investment has already soared past $40 billion in 2020, and they’re in the headlines every day.
Meanwhile, successful investing is not about buying the right company.
Successful investing is about buying the right company at the right price. Is this the case with SPACs?
Well, my fundamental analysis tells me that the SPACs are overhyped stocks that currently trade with very high valuations such as AEye (LIDR), Matterport (MTTR), Embark Technology (EMBK), Clover Health (CLOV), Opendoor Technologies (OPEN), Hyliion (HYLN), Desktop Metal (DM), Canoo (GOEV), Lordstown Motors (RIDE) and Virgin Galactic (SPCE) to name some.
In other words, I believe that the SPACs are landmines and the SPAC bubble will burst sooner or later.
Therefore, ignore all those stock pickers who recommend buying these SPAC-related names.
If you do not ignore them, I forecast that you will regret it in the next couple of years.
Value, Value, Value
So how can investors make good returns with low risk?
They can make good returns with low risk, if they invest in select small-caps at the right price.
On that front, the small-caps have outperformed large-caps over the last 20 years. If you do not believe me, Franklin Templeton's (BEN) report is here with all the facts. BEN is a global leader in asset management with more than seven decades of experience.
And in its latest global fund manager survey, Bank of America (BAC) Global Research found the number of investors who think small caps will outperform big cap stocks in the next 12 months remains at a record high, as illustrated below:
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Specifically, our picks are long ideas and short ideas.
Moreover, our long ideas are select small-caps.
Our small-caps are value stocks for capital appreciation and high-yield dividend stocks for income seekers.
In other words, no matter what type of investor you are (i.e. value investor for capital gains, dividend investor, short seller), you will find in our research what you are looking for.
And our proven recipe for success combines undiscovered carefully-selected companies, based on strict investment criteria and technical analysis that pinpoints low-risk buy entry price levels.
It’s not a get-rich-quick scheme. It's not for day traders or momentum traders either.
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Disclaimer: The opinions expressed here are solely my opinion and should not be construed in any way, shape, or form as a formal investment recommendation. Value Digger does not accept any liability for any loss or damage whatsoever caused in reliance upon such information. Investors are advised that the material contained herein should be used solely for informational purposes. Investors are reminded that before making any securities and/or derivatives transaction, you should perform your own due diligence. Investors should also consider consulting with their broker and/or a financial adviser before making any investment decisions.
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