Technology Micro-Cap Stocks

Technology Micro-Cap Stocks

Top Canadian Hedge Fund Focuses on Technology Micro-Cap

Canada's best hedge fund manager of last year is shifting his focus to what he expects to be the new high-performer: technology micro-caps. Steven Palmer, the head of AlphaNorth Asset Management Inc. has been increasing his position in technology micro-cap stocks.
“There will be a pullback in resources this year,” predicted Steven Palmer, the president of Toronto-based AlphaNorth Asset Management Inc. “By the end of this year, resource stocks will be flat to modestly higher, but returns won’t be as good as we experienced in 2010.”

In contrast, large-cap technology stocks such as Research In Motion Ltd. are looking attractive as they “have been beating earnings estimates, trade at cheap prices, have tons of cash on their balance sheet and have been buying back stock,” said Mr. Palmer, who runs the $65-million AlphaNorth Partners hedge fund, which garnered a stellar 114-per-cent return in 2010.

He has been accumulating positions in technology micro-cap stocks with unique concepts, ranging from new ways to raise fish to language-translation software. “If you are positioned early, you can be ahead of the curve,” he said. “This is what we did with rare earths. We were positioned last summer with our biggest weightings in a couple of rare-earth names - Stans Energy Corp. and Ucore Rare Metals Inc. - and they have been star performers.” Source

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