Paul Andreola is a highly regarded small cap investor with over 25 years experience in the industry. Similarly to Ian Cassel, the Canadian has a strong track record of discovering tiny stocks with huge potential that capture gains of 50% to 200%. Mostly he finds these investment opportunities manually through studying financial statements, industry reports and interviewing management.

Previously Andreola worked as a stockbroker for 10 years, again focusing on small caps which is unusual for a broker. He also co-founded two public companies and is currently CEO of NameSilo Technologies – all technology companies. This unique experience of starting businesses and raising finance gives him a unique edge over other investors. He understands how crucial management teams are and the pitfalls they have to avoid to scale a business.

On The Acquirers Podcast, he mentions a specific checklist he uses to analyze micro caps and if he’s fortunate to hold them long term, it can result in some explosive returns! Xpel Technologies, an auto parts manufacturer and distributor, happened to be one of these big winners. He discovered Xpel trading at 20 cents in 2013, the stock ended up becoming a 100-bagger from the prices he was buying it at. He sold Xpel in the 10’s but now trades at $52.

Four Main Criteria he looks for:

1. Hitting a new 52-week high

Contrary to other investors that look to buy shares at a discount, Andreola stated once he started buying stocks making new 52-week highs, the performance of his portfolio went crazy. He went from averaging 10-15% per annum to 100%.

2. 25% Growth Per Year in Revenue and Earnings

Andreola looks for companies growing at least 25% per year on a revenue and per share basis. The key aspect is finding hyper growth stocks with strong fundamentals behind them and are at an inflection point. They could have just become profitable or close to it.

3. Look for Something New

“You want to look for new things. New management, new products, new territories, new something,”

New management, products, and territories should catch investor interest and will potentially push the share price higher.

4. Low institutional ownership

Andreola says the idea behind this step is very simple. You want to get in early before institutional investors. Once they hear about the stock and like the company, they’ll push the shares higher with their large cash coffers.

Small Cap Discoveries

Small Cap Discoveries is a newsletter/investing community run by Andreola and Trevor Treweeke. Their service focuses on finding high quality micro caps long before everyone else. In fact, in the last five years, he’s brought subscribers seven ten baggers – meaning they got ten times their investment.

The companies profiled typically trade on Canadian exchanges and of course, barely anyone follows them. These companies can go undiscovered for years and with a bit of luck have the potential to become ten baggers.

Small Cap Discoveries isn’t cheap as they charge $249 per quarter for access to their premium research and community. To attract new members they now are offering a one month trial for $10 so new members can try out the service before making a big commitment.

Considering he mainly invests in Canadian micro caps it’s a surprise he has no resource stocks in his portfolio. Paul seems to prefer companies in the tech and biotech space with reccurring revenue.

Andreola’s Portfolio

I signed up for a month of Small Cap Discoveries to see what all the hype was about. Below, is their portfolio as of December 23rd 2020, total returns of 149.2% on his current holdings.

More than likely you stumbled across Peter Leeds while randomly googling about penny stocks and now you’re looking for an honest review as there is very little information from previous members. With so many scammers online selling their own newsletter with no real track record, it’s hard to trust anybody. On the other hand, Peter is one of the leading authorities on the subject of penny shares and has been around since 1995, selling over 41,000 subscriptions.

Peter Leeds has been featured in major media outlets as a financial analyst for CBS, FOX, NBC, CNNfn, Russia Today and Associated Press. He maintains that he and his team receive no compensation and don’t invest in any of his stock picks before they’re released to members. I’d estimate his net worth to be near $4 million, obtained from his educational business and privately investing in companies.

How He Got Started

Mr Leeds started trading at 14 years, investing $4,000 into a small unknown company called Siberian Pacific Resources. Within two weeks lost his entire investment and learned a valuable lesson about the dangers of penny stock investing. He spent the next couple of years learning how to research micro cap stocks for himself. He studied the work of investing legends Warren Buffet and Peter Lynch, reading dozens of financial books. He began by paper trading which was the biggest catalyst to his success, experimenting with different trading strategies and eventually developing his own investment system, now known as Leeds Analysis.

Here’s a Paid Advertisement of Peter on Stock Watch

Leeds Analysis focuses on finding high-quality small cap companies with good management, little or no debt, growing revenue, posses a competitive advantage, expanding market share and massive upside potential. He has written 3 penny stock books (his latest book – Penny Stocks for Dummies) and has spoken at various stock market seminars. As a side note, you can find free PDF versions of all his books online or order them from Amazon.

Pro’s

• Picks are unbiased and employs his own research team to find tiny unknown companies nobody is following. 
• Good customer service and you can call the support team if you have any problems.
• Doesn’t collect your email address and spam the hell out of you with new products.
• On his Facebook page, he answers traders questions and gives an objective opinion on certain companies or hot topics in the media.
• Not a scam artist which is refreshing in the corrupt world of penny stocks. So many unethical newsletter owners would take advantage of this opportunity to pump and then dump worthless stocks on newbie subscribers.
• Help’s newbies grasp a good understanding of how penny stocks work and how to avoid the common pitfalls of trading small cap stocks.
• Has been around for over 15 years and there are very few complaints of his service.
• Great for people who have a full-time job or don’t have the time to do their own due diligence.
• Offers a free trial unlike other newsletters and seems like an all-round nice guy.

Con’s

• His newsletter is not what it used to be – over the last two years the quality of recommendations has declined and fewer members are making money than before. (his performance has not been helped by the current economic crisis)
• Recently he has been focusing a lot of effort on marketing his service and publishes press releases promoting himself. As an entrepreneur, his main aim is to make money but at least his marketing isn’t as obnoxious as Timothy Sykes, regularly posting images of himself holding stacks of dollar bills to attract attention.
• Doesn’t publicly reveal his portfolio or show trades which could be verified on a website like Profit.ly.
• Sends out a bunch of stock alerts every month, if they do well he puts them on his site and if they do badly they disappear and are forgotten about.
• Only recommends stocks under $5 which are very speculative and may not be for everyone.
• Membership costs $199 a year, it would be better to charge a monthly fee of $30.
• Provides a very basic level of education that could be obtained for free elsewhere.

In conclusion, I would give his service a 7/10. If you have the money and don’t have the time to perform your own research, you should maybe try it out but you’re unlikely to receive a 500% return as advertised in his promotional videos.

Connor Bruggemann, a young scrawny teenager from New Jersey, shot to fame when theVerge.com featured him in an article detailing his penny stock success story. He turned $10,000 into well over $300,000 in just 18 months with extremely risky investments using an E-trade brokerage account. The crazy thing is he placed his trades solely using his iPhone, sometimes during class which got him into trouble. His parents had no idea their son was living a risky second life, day trading penny shares from his bedroom. His father was the one who got him involved in the stock market and invested in blue chip stocks that had a strong dividend yield. This quickly got boring for Bruggemann as he was making barely any money with his small portfolio. Connor became attracted to penny stocks after reading about how Timothy Sykes was making tens of thousands per month. The kid had balls, he took $10,000 saved up from a part-time job and ended up throwing all of it into one stock.

His first major trade was ACYD, a company that manufactured industrial grade wireless equipment for city-wide wireless networks. He went all in buying millions of shares at 1/3 of a penny after listening to a conference call discussing their plans for a potential share buyback program. Over the coming months, their stock price rose significantly as Connors account size ballooned. By October of 2013, the stock price was at 6 cent, with an account worth $200,000, he didn’t sell immediately and when he eventually sold his position $94,000 remained. Despite missing out on massive gains, $10,000 to $94,000 is still insane. With nearly a six-figure account, he thought he had it all figured out, he got humbled by the market losing a further $30,000. In the process, he realized something had to change and stopped trading for three months. In the weeks following, he began reviewing trades to discover his errors. He identified common mistakes he continually made and gradually started to refine his own strategy.

His Strategy

He created his own strategies that allowed him to consistently make money trading low priced volatile stocks. Over the next two years, he accrued $150,000 – $200,000 through hundred’s of small profitable trades. All these small gains add up to an impressive figure overtime. His success is mainly attributed to luck accompanied with his hard work ethic. Connors strategy simplified revolves around three core aspects: cutting losses short, trading only low risk high reward setups and letting your winners ride. Following two or three chart patterns, he swing trades shares under $10. Patience plays a key role in his success, he waits to enter a stock on his watchlist like a sniper and exits for a small loss if the play doesn’t go as intended.

To leverage all of his media attention he setup investorscorner.org, a community of experienced traders that apparently can teach others to replicate their success. His service is expensive, charging $147 per month or $1997 for the year. He took a page out of Tim Sykes book by monetizing his trading knowledge and selling educational material to newbie traders. This has grown into a six figure business before he has even graduated from high school.

Profit.ly

Bruggemann agreed to join Profit.ly as a guru with his own newsletter “Connor Alerts“. Albeit his youth and lack of experience Sykes still wanted him to teach using his platform. Tim aggressively promoted him on his blog and jokingly remarked that he looked like “Channing Tatum with down syndrome”. According to his track record, overall profits of $415,000, 54.46% winning percentage out of 3342 trades with an average gain of $516. Subscribers to ConnorAlerts get a daily watch list, see all trades in real-time, access to a fully moderated chat-room, 100’s of video lessons along with weekly Q&A’s. He already has a successful student from Brazil, Rafa who has surpassed $100,000.

What You Will Learn from SchoolTrader DVD (Buy Here)

• Five hour DVD,  ideal for people with busy a lifestyle whether that be work or college.
• Highlights and downfall of his stock market journey and lessons learned that have been featured on Fox Business, Bloomberg, BroBible and interviews on YouTube.
• Basic terminology to understand what is happening in the chatroom and watchlist.
• Position sizing
• Risk Management, finding low risk and high reward setups.
• His strategy discussed in depth with detailed examples.
• Review his best and worst trades.
• How to scan for profitable setups.
• How to create your own watchlist.

Testimonial from a user on Investimonials.com

What happened to Connor Bruggemann?

Connor Bruggemann is no longer actively trading or teaching on Profit.ly but his DVD is still available to buy. After quitting trading, he worked at Herb first as General Manager before getting a promotion to VP of Revenue. As of February 2020, Bruggemann is a partner at CMB Capital, a venture capital and private equity company.

BioRunUp is a small cap subscription service run by Mark Messier and Mike Havrilla, that teaches people how to trade biotech stocks. Mark Messier is the original founder of BioRunUp.com and a former IT professional with strong analytical skills. Mike Havrilla is a former pharmacist and has a wealth of experience when it comes to trading volatile biotech companies! Combined together Messier and Havrilla have made $3.8 million in profits day trading biotech stocks, all verified on Profit.ly.

Trading Strategy 

Their strategy focuses on finding drug companies with short term catalysts so they can profit by either buying or short selling. Typical catalysts are results of clinical trials and drugs seeking FDA approval. This is an extremely volatile sector of the market that experiences wild swings based just on data from a research study. If the results are disappointing, the biotechnology stock can drop 50% within hours.

BioRunUp’s Research and Analysis include:

• Reading SEC Filings – companies reveal everything in SEC Filings they are boring to read but are a goldmine for juicy information. 
• Researching press releases, bulletins boards, forums and the companies official website.
• Evaluating the potential risks, example why might a company be denied FDA approval.
• Analyzing drugs and evaluating their future demand.

Key Features for Paid Members:

• Comprehensive reports of upcoming FDA and clinical trials.
  
• Given entry and exit price points for each trade.
• Chart and technical analysis advice.
• Weekly watch-list of hot biotech stocks to watch.
• Weekly webinars where members can interact and ask questions.
• Access to a chat room full of experienced day traders.
• Video lesson library – provides a strong foundation for learning the basics of trading.
• Alerts via text, email and twitter of critical news.
• Allowed to promote their service by joining their affiliate program.
• Members can view Mark Messier and Mike Havrilla’s trading account to track their profits and see what stocks they’re holding.

Positives 

• Plenty of positive reviews from customers on Investimonials.com.
• Access to their private Twitter feed so you can see them post their trades live.
• Possible for traders to make money by shadow trades as long as they enter at a good price. I don’t recommend using this approach because these stocks move too quickly.
• Short selling opportunities as the alerts could potentially send share prices too high.
• Highly recommended by Timothy Sykes and partnered with him on Profit.ly to sell their course and DVD, “Ultimate Guide To Biotech Stocks”.
• Mark and Mike have a strong track record.

Negatives 

• Biotech penny stocks are volatile, meaning you can easily lose 60% on a single trade.  
• $99.95 a month or $697 for an annual membership is too expensive for the average person. In addition, subscribers will need at least $2,000 to trade alerts. 
• Some stock picks are illiquid that spike when the alert is given out to subscribers and fall rapidly after the alert. Members follow alerts without thinking and get angry when they lose money. Also in the past members have accused the owners of front running alerts.
• Both guys trade using margin, not everyone will be comfortable short selling fast moving stocks.
• Their risk management skills are questionable – in the past both guys have suffered big losses. This is normal for every trader but this still worries me.
• Most of the data they find is available for free on websites such as biopharmcatalyst.com
• I think there are better subscription services from people who have a better understanding of the industry.

In conclusion this service is not for the faint-hearted. There is potential to make and lose a lot of money, it’s high risk / high reward.

James Altucher’s Top 1% Advisory research newsletter is making absurd claims that you can make millions using his secret backdoor method by investing in start-ups. If you didn’t know James’ background and past track record before reading the sales page, you’d think it was a complete scam.

Trying to find an honest opinion of his service is almost impossible as every website who “reviewed” his newsletter are affiliates. They make 40% commission’s for every person they refer, it’s clear that these people haven’t even signed up to his service and have virtually no experience of stock trading. $2500 for a one year subscription is an insane price to charge, he must be going through some financial difficulties. Although it’s estimated James net worth is near $20 million, I’d guess it’s substantially lower than that figure after two divorces.

Background

James is pretty much a jack of all trades, hedge fund manager, angel investor, author and entrepreneur. He’s a machine; I don’t understand where he get’s the time to do all this stuff. Writing 17 books and writing for publications such as Huffington, theStreet.com and Seeking Alpha. If you’ve had a chance to look through his resume, it’s quite impressive, full of high and low’s. Being an entrepreneur is part of his DNA and in total has started and co-founded 20 different companies. Most of these businesses were in the finance industry with 17 of them ultimately failing in the end. Reset Inc and Stockpickr were the most successful ventures.

Reset was a web design firm that had celebrity clients that included Wu-Tang and Time Warner. HBO ended up buying the company for $15 million but somehow managed to lose all that money in the space of a year. He went from $15 million in the bank to $143 from reckless spending and bad investments during the dotcom bubble.

James worked his way back up, setting up a hedge fund and developing software that was able to model the market so he could identify profitable trade ideas. Through his experience in the hedge fund industry, he learned about every single hedge fund strategy and built up a solid network of connections. After that in 2006, he created Stockpickr, a social network for traders to share investment ideas. A year later TheStreet.com stumped up $10 million to acquire Stockpickr.com. Once again Altucher went from an average Joe to multi-millionaire until the crash in 2008. He picked himself back up again and became a seed investor in Buddy Media that was later acquired by Salesforce for $800 million.

Altucher’s Top 1% Advisory Explained

Leveraging his super-connected network of wealthy friends he can recommend early start-ups opportunities not available to the general public. He proclaims that these groundbreaking opportunities have the potential to provide crazy returns of 1000% for the average investor. Althucher brags that some of his network are the same venture capitalists who backed well-known start-ups such as Uber, Airbnb, Dropbox and Buzzfeed. This is a high-risk, high reward strategy that requires a lot of luck and patience. It’s kinda funny for someone so intelligent his net worth has seesawed for the past two decades, going from broke to rich three times.

Pro’s

• Apart from providing members with stock picks he shares his wealth of knowledge on a wide range of topics. Rather than just being a sheep you could learn to trade on your own and generate your own ideas.
• Investing in the next Twitter is unlikely but at least your odds are slightly better with his ideas. James put’s a considerable amount of research into every report and makes a compelling reason why you should buy each idea.
• $2,500 is very pricey, I suggest you create a group buy with 10 other people and split the cost. $250 among 10 people is obviously more affordable, one person joins and forwards the emails sent out to the rest of the group.
• Altucher found a “loophole” to overcome the SEC’s 501 rule that permits people with less than $1 million investing in start-ups.
• Offers a 30 day trial to members to try it out risk-free.

Con’s

• The newsletter is targeted towards more wealthy investors with at least $20,000 to invest in his ideas, to make it worthwhile. His recommendations are mainly mid cap stocks around the $15 range with some penny stock picks thrown in.
• His marketing tactics are very shady; even penny stock promoters would be like “wow that’s a bit too much buddy”. People are expecting to sign-up, just buy his stock picks and make thousands overnight. If only it was that simple.
• His secret “1000% backdoor” plan is interesting but disappointing, it’s just a gimmicky pdf. This sounds good in theory but for every success story like Twitter and Facebook, there are 100’s of failed startups that went nowhere.
• The performance of his portfolio is hit and miss, a few are up 10%-30% and a handful are down 20%. These are long-term picks, 18-24 months are the suggested holding times so you need to be patient. Overall he breaks even.

Portfolio

TEDx Talk

Short Example of Stock Report from September 15th 2016

Hertz: Super Contrarian Play

Positives:
» Hertz recently partnered with Uber and Lyft to get in on the ride-sharing trend.
» At the urging of billionaire investor Carl Icahn, the company brought in a new all-star management team with a history of turning around struggling businesses.
» Several members of the new team— including the CEO, CFO and CIO— are buying up shares, and institutional investors are also establishing large positions.
» Management plans on cutting up to $950M in expenses through 2020, which could help grow earnings by 25%.
» Hertz saved more than $2B by restructuring its debt, and it plans to use some of that cash to buy back $1B worth of its shares.

Risk Factors:
» More travelers are using ride-sharing platforms for airport rides, which
is how car rental companies typically generate the most revenue. Hertz generates about 75% of its U.S. sales from airport operations. But most of this risk is factored into shares with the stock down 40%-plus from its highs.
» Though the company is reinventing itself, historically these kinds of transitions can present major challenges,
resulting in lower stock prices as investors lose patience.
» Over the past two years, the company share price has dropped by 40%.

The Top 1% are building huge positions in Hertz
In late 2014, billionaire and legendary hedge fund manager Carl Icahn took an 8% stake in Hertz. We’ve already talked about that.
As I explained earlier, Icahn used his influence to change the entire management team. He also has one of his own experts sitting on the board of directors.

Today, Icahn is the largest shareholder in Hertz. His stake has grown to 15.2% after adding to his position in June. This amounts to roughly $640 million. Since he continues to add to his position each passing quarter, Icahn appears to be in Hertz for the long term.

Other big institutional players who are big owners include in Hertz include Blackrock ($4.8 trillion in assets under management), Fidelity ($5 trillion in assets under management), Vanguard ($3 trillion in assets under management) and Parametric Portfolio Associates ($150 billion in assets under management).

David Einhorn’s Greenlight Capital also established a new position in Hertz. In August, the billionaire hedge fund superstar revealed he has taken a $5.4 million stake in the company. Einhorn usually builds his positions over time. In other words, I expect Einhorn to become a significant shareholder in Hertz over the next three to six months.

Not only are these superstar hedge fund managers and large institutions buying shares of Hertz at these depressed levels, but company insiders are buying shares as well.
• CEO John Tague recently purchased 50,000 shares for just over $900,000
• CIO Tyler Best bought 27,450 shares for roughly $502,000
• CFO Thomas Kennedy purchased 25,000 shares for $456,000
• And General Counsel Thomas Sabatino, Jr. bought 15,000 shares for a price of $270,675

These insider purchases amount to a combined $2.1 million.

I’m sure these insiders who help manage the day-to-day operations would not be buying the stock at
these levels unless they could more than double their money on the stock over the next few years.

Based on my analysis, Hertz should be trading over $65 a share right now. That’s more than 30% upside from the current price.

Longer term, Hertz could generate triple-digit returns for investors as they continue to cut costs,
generate huge cash flow and buy back massive amounts of their stock.

Investment Synopsis:
» Buy-up-to price: $53 per share
» Fair value: Fair market value is $65 per share.
» Exit strategy: Hold for at least 24 months. This is when the stock is likely to see its greatest gains come to fruition.
» Position size: 2%-3% of total portfolio

From reading my Top 1% advisory review, it’s clear that although it’s expensive, James Altucher’s newsletter is a great resource for wealthy investors looking to generate a safe return. My advice is to join only if you have at least $20,000 to invest in his picks.