If you came up to me at a cocktail party — I’m speaking post-Covid, of course — and said to me that you had this great $4 billion mid-cap investment called BitTorrent (CCC:BTT-USD) that was likely to move higher, I’d be all over it like a pig to mud.
But, here’s the thing, in the world of cryptocurrencies, BitTorrent isn’t a mid-cap investment; it’s a micro-cap, and that’s being generous. If BitTorrent were included in Coindesk’s top 20, it would rank in 18th spot.
The first time I wrote about BitTorrent was at the end of April. I suggested it was a wolf in sheep’s clothing. I will continue NOT to recommend it until I get some inkling this isn’t a giant Ponzi scheme.
In the meantime, there are plenty of good micro-cap stocks to recommend to investors. Here are three I think will make you money over the long haul.
Better Than BitTorrent: Sharps Compliance (SMED)
Houston-based provider of specialty waste management services for the healthcare industry Sharps Compiance is an esoteric stock. I’ll admit I’ve never heard of it, but you can’t know all 4,000 or so U.S.-listed stocks.
A quick peruse of its Q3 2021 financials tells me business is growing by leaps and bounds — it had $31 million in customer billings in the third quarter, 200% higher than a year earlier — and it’s profitable with operating income during the quarter of $9.0 million.
Now, it’s fair to say that business is brisker than usual because of Covid-19. It even said so in its press release announcing the quarter’s results.
“Mailback billings of $24.4 million grew 428%, driven by strong COVID-19 related orders,” the company said in a press release.
So, in layman’s terms, when you get your Covid-19 vaccine, your needle is mailed back to the company for safe disposal.
However, if you think the end of Covid-19 is the end of the company. Think again. Sharps Compliance sees a long runway for its services post-Covid.
I do too.
Better Than BitTorrent: Gaia Inc. (GAIA)
This company has been around forever. Gaia ink has 10-Ks dating back to 2000 when it was known as Gaiam. At the time, it called itself a lifestyle company. Being fascinated by sports-related investments, I remember when it sold yoga mats, etc.
In 2015, it apparently became Gaia, the next best thing to sliced bread.
“Gaia is tapping into two very powerful shifts in the way society interacts with businesses. The trend toward subscription-based services isn’t going away, and we strongly believe that the next shift is going to be toward a transformation economy,” said Brad Warkins, Gaia president, in its November 2015 press release.
So, essentially, they’ve taken the lifestyle brand into the 21st century through a video streaming platform.
On May 3, Gaia reported Q1 2021 sales of $18.9 million, 30% higher than Q1 2020, and its third consecutive quarter of sequential earnings and cash flow gains. Equally important, it passed 750,000 members.
Go to their consumer website and you’ll see that you can get live access for $399 per year. It’s got more than 8,000 titles.
By no means is Gaia a slam dunk. However, if the world continues to welcome healthy living concepts, it’s got a shot to grow beyond its current $250 million market capitalization.
Better Than BitTorrent: Lazydays Holdings (LAZY)
A recent survey found that Fourth of July rentals of recreational vehicles (RVs) through the peer-to-peer RV platform RVshare are already double what they were in 2020. The survey also found that 62% prefer RVs to camping.
So, with that in my mind, my third pick is a Flordia-based operator of RV dealerships. Lazydays currently has 13 dealerships and service centers across the U.S., with three more to come online in 2021. It is the number two RV dealership brand in the country, behind only Camping World Holdings (NYSE:CWH).
The company’s revenues have grown every year since 2015. In 2020, they were $817.1 million, 60% higher than in 2015. Over the same period, its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) grew by 177% to $59.0 million.
Interestingly, Lazydays went public in 2018 through its merger with Andina Acquisition II, a special purpose acquisition company (SPAC). The SPAC went public in November 2015 at $10. If you’re still holding, you’ve gained 127% over 5.5 years.
The best might be yet to come.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.