Small-Cap Portfolio Review

A review to identify the next steps to take

This is the first of a two-post series where I will review my small-cap portfolio, followed by my large-cap portfolio. The goal is to assess the relevance of each stock and determine if my investment thesis still holds. This process ensures that every stock has a justified place in my portfolio. I will also identify the weakest stocks to potentially make room for more promising opportunities.

For each stock (16 stocks currently in my small-cap portfolio), I will:

• Present my average purchase price + the current price

• Present the major metrics

• Explain my current view on the company

• Estimate the yearly total shareholder return. This is calculated with 6 pillars

  • Estimated organic growth

  • Estimated growth from acquisitions

  • Dividends

  • Share buybacks

  • Margin increase or decrease

  • Valuation ratio increase or decrease

• Describe my buying zones

• Present my strategy with the stock

Please note that this is my real portfolio, as I believe it is important to have skin in the game.

How did I find these stocks? You can find my investment framework in this article. I share my trades, including the stocks I buy and the timing of my purchases, exclusively with my paid subscribers. While this newsletter provides valuable content for free subscribers, becoming a paid subscriber unlocks even greater benefits to help you gain an edge in the market.

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1. AJ Bell

Metrics

• 2025 growth 9.7% / 2026 growth 6.8% / 2027 growth 11.4%

• 2025 PE 20.6x

• 2025 dividend yield: 3.0%

• Estimated TSR (Total Shareholder Return) 12.2% / year

Trade

• My position: 190 shares

• Current price: £4.74

• First purchase price: £3.15 (February 2024)

• P&L since first purchase: +50.4%

• Current P&L: 32.9% + dividends

My opinion about the stock

The stock performed well in 2024. I initially purchased it based on its strong business model, robust sales dynamics, and an exceptionally attractive valuation. Following my acquisition, the stock delivered excellent performance, though its price has remained relatively flat since August 2024.

The business fundamentals remain solid. Its net cash position accounts for 10% of the market capitalization, equivalent to approximately two years of net profit. Margins are expected to continue improving steadily. Despite a slowdown in growth (projected to average 9% annually over the next three years) there are no reasons to sell at this time.

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2. Betsson

Metrics

• 2025 growth 9.2% / 2026 growth 6.0%

• 2025 PE 8.1x

• 2024 dividend yield 5.2%

• Estimated TSR (Total Shareholder Return) 17.6% / year

Trade

• My position: 116 shares

• Current price: 145.3SEK

• First purchase price: 100.4SEK (March 2024)

• P&L since first purchase: +44.4%

• Current P&L: 24.8% + dividends

My opinion about the stock

2024 has been an excellent year for the company, achieving nearly 18% growth. The company continues to benefit from its strong presence in South America, and the improving Argentinian economy could provide an additional tailwind. However, growth is expected to normalize to around 6% organically by 2026.

With steadily improving margins, a reasonable valuation, a substantial net cash position, and potential acquisition opportunities, the company is well-positioned to continue delivering strong shareholder returns through its dividend, which offers a 6% yield at a 50% payout ratio. Despite this, investors remain cautious about the sector, and there are clear risks, such as regulatory challenges. For now, the investment thesis remains intact, and the stock is no more expensive than it was a year ago, even after a strong performance.

From a technical perspective, the stock is approaching its 2016 all-time high (ATH) of 155 SEK. Two scenarios are possible:

1. Pullback. The stock may fail to break through the resistance on the first attempt, offering an opportunity to add to the position.

2. Breakout. If the resistance is crossed, the previous resistance could act as support, leading to a pullback followed by a new rally.

In either case, there is no reason to sell the stock at this time, though I remain cautious due to the risks inherent in the sector.

If you are interested in the sector, you can find my article about this industry just here

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