Equity investors, quite rightly, are looking beyond large caps for opportunity. There’s only so much Commonwealth Bank and Magnificent 7 you can have in a portfolio before things start to look top-heavy.

But moving down the market cap spectrum does not have to equal higher risk – not if you know where to look.

Whilst small-cap names are often under-researched and overlooked, this can create opportunities for outsized returns. The key is to have a process for unearthing the mispriced or underappreciated gems.

So, in this episode, Michael Steele and Datt Capital’s Emanuel Datt share what they are looking for when mining the small-cap space, before putting their method to the test by analysing three small-cap names.

For good measure, they each share a diamond in the rough small cap that they are backing right now.

Please note this episode was filmed on 7 May 2025.