So says JRR Tolkien in his poem ‘The Riddle of Strider’. In the Novel ‘The Fellowship of the Ring’, Gandalf wrote the poem as part of a letter for Frodo Baggins, to help him identify who ‘Strider’ may be. It is a minor play on words, perhaps best deciphered to ‘Not all who wander are lost’. It explains the fact that Strider – Actually Aragorn, son of Arathorn, rightful heir to the throne of Gondor – Has been spending decades in the wilderness, both protecting the land and figuring things out.

I like to wander. I find interest in many things. I like my brain to be stimulated. I like to dive deep into things, but only after a thorough ‘circling of the field’ to make sure it will be a good, enjoyable or profitable use of my time.

As usual, I’ve been wandering around a few potential investments. I read about them, do some industry research, then wander off. A couple weeks later, I show up again, dig through some financials, investigate management, and then quietly slink away. A few weeks or a month after that, I’ll run some technical analysis and perhaps try to form up a valuation. After a few visits, I start to get a handle on whether I should do some committed work – That is, try to qualify the investment based on my key criteria – Merit and Leverage. Oftentimes, I’ve done 75% of the work just by wandering by a bunch of times.

Taking my time also allows me to stay out of trouble….It slows down the decision making progress, and allows me to form conclusions vs jump to conclusions.

Here are a few companies I’m looking at right now, with some casual comments about what I’m thinking.

LEXXW (Nasdaq) – Lexaria Bioscience Warrants

I’ve been following LEXX and its publicly traded warrant, LEXXW for a few months. It is a complicated little company in the early stages of testing their ‘proprietary drug delivery technology, DehydraTECH, (which) improves the way active pharmaceutical ingredients (APIs) enter the bloodstream by promoting healthier delivery methods and increasing the effectiveness of fat-soluble active molecules and drugs.’

What has me interested is their focus (And recent early trial successes) with improving the delivery (ease, dosage levels and impact) of CBD, Nicotine and other molecules. DehydraTECH looks promising and useful.

What is stopping me from moving on the investment is some historical baggage of the company, and the early stage of the venture. It has a long way to go. I have a VERY small position in the warrants and am watching with interest.

SLHG (TSXV) – Skylight Health Group

I’ve been watching Skylight for a couple years. Formerly bullish, I ejected from the stock way back, have fiddled with it a little since, and now am watching it flounder on the floor like a fish out of water.

The ONLY question for SLHG right now is whether it goes bankrupt, engages in an insanely dilutive financing, or is taken private for a pittance. I’d like to think that the company is going to make it, and hey – anything is possible – but based on what I can see on the balance sheet, a restructuring is imminent. It may survive from here, but in my opinion the odds are against it. And I can’t invest in anything without being confident about the odds.

Why do I even bother having it on my watchlist? It’s all about the learning. And learning how companies get into trouble is just as important (and interesting) as learning how they succeed.

GWAV (NASDAQ) – Greenwave Technologies

One of the main ways I get ideas is from my fellow investors. A good friend of mine discovered this little recycling company and brought it to my attention. Greenwave is recently public, and seeks to roll up fellow metal recyclers in a growth by acquisition strategy (although there is an organic growth component delivered by investment in specialized mental processing equipment)

What I like about the company is the valuation…..After going public, in classic microcap fashion, driven by a brutal market, the Share price cratered. So if they pull this venture off, there is some serious upside.

What I’m trying to figure out is the business model (seems solid, but not a lot of detail out there yet) and getting comfortable with management. It is formerly a private company, now public, with a CEO who has done an amazing job at growth and getting them to the public sphere. But growth by acquisition in an industry whose input costs are commodity based….There is some real volatility there. And I know it is a small, newly public company, but the bench strength seems a little light at this point for a NASDAQ traded company.

However, I am a believer in entrepreneurs, and GWAV is clearly managed by one, and I admire that. I have a very small position and am interested to see how this evolves.

RCG (TSX) – RF Capital Group

Let me tell you, there is nothing worse than a company whose key shareholders are the reason the share price stinks. I believe RCG is worth at least double its current market price, but the price will go nowhere until the key shareholders put in place a board who will get the job done. Instead, I think they are happy to continue to grind shareholders into dust.

Why do I follow it? At some point, whether it is in 1 year or 10, this company will be sold. It almost happened a couple times. To think they were offered 367 million for the company two years ago – and the buyer made it clear they’d go significantly higher. Today’s market cap is 204 million. You can’t make this stuff up. I’m not even a shareholder and I’m pissed. And these people claim to manage money for a living.

I also follow it as I have successfully traded this company several times. I’m not approaching it in this manner anymore until things look a little more favourable economically. And, management has been so incredibly ineffective at creating value here I’m now in ‘wait and see’ mode.

LSPK (TSX) – Lifespeak

I like what LSPK is doing. Its services are needed, and its ‘raison d’etre’ is widely embraced and supported by business and governments. Like many (all?) small cap companies in the health / wellness sector, its share price has imploded, and the only thing to marvel at is how they actually managed to go public at the valuation they did. Such is the power of a great story.

Debt is the enemy of financial health. And debt is what LSPK has plenty of. They’ve managed to grow their top line admirably over a short period of time. But the debt overhang is big and bad. Not so big that they are in immediate trouble, but big enough that it’s an issue until real clarity emerges about the path forward.

One of the impacts of the past couple years is that risk assets – small caps, venture companies, tech businesses – aren’t being valued the same way as they were pre COVID. And rising rates have changed the way things are looked at as well.

I’m rooting for LSPK. I may even be a buyer of the shares at some point. I’m waiting on financials to see how the integration and organization of the companies is progressing. It’s on the watchlist.

GLTA!