Find the young Episodic Pivots
September 1, 2025
The most explosive Episodic Pivots occur in stocks that have Gone Public in the last 10 years and have a capitalization of less than $ 10 billion once they enter their growth phase.
When stocks go IPO, many times they may not be ready for immediate growth. Many are development-stage companies. They IPO when conditions are right for an IPO, as they need money to grow.
Their real moves start when they start growing revenue aggressively. After the IPO, they typically start going down. Most trade 50% or more below their IPO price and get neglected. They will have very low capitalization, low fund ownership, and low interest from analysts and general investors.
In the meantime, they continue to work on their business, and some of them start growing very rapidly as their product or service takes off. When they come out with earnings, they surprise everyone big and then the explosive move happens as funds buy such growth stocks.
Not all IPO reach these milestones; most just disappear in a few years.
To find the IPO with good revenue growth, I use the following two scans in Marketsurge.
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Thanks for all the content you’ve shared over the years! I’ve now read all of your blog posts and I really appreciate the effort you have put in. As I understand it after reading everything, EPs can come in different forms — biotech, $9M earnings EPs, etc. To have the probabilities on your side, the stock has to be neglected, and as a bonus, it helps if there’s a low float, high short interest, etc.
ReplyDeleteOne thing I haven’t quite figured out — and I’d really appreciate your insight — is this:
I trade both Swedish and U.S. stocks. In Sweden, we only have “earnings” or “earnings before taxes.” In the U.S., however, you have both GAAP and non-GAAP earnings.
For example, if non-GAAP shows a loss but GAAP shows a profit, I assume quite some funds and institutions would pass on the stock, since at the very least they want to invest in profitable companies. Maybe that is a wrong assumption?
Do you personally pay more attention to the “conservative” GAAP net earnings when looking for >100%+ earnings growth, or do you focus on the non-GAAP earnings when looking for >100%+ earnings growth? Sometimes it can be a big discrepancy between the two measures.
Kind Regards Johannes
Profitability does not matter much in USA it is revenue growth that investors focus on.
DeleteOkey, thanks a lot for your answer! :)
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