Trust, Then Verify with Leo Trudel, Co-Founder of Aurelion Research

Why It Matters

Aurelian’s research‑portfolio alignment provides a bias‑free, high‑conviction model that can unlock superior returns for investors targeting overlooked micro‑cap opportunities.

Key Takeaways

• Align research and portfolio to ensure unbiased, owner‑investor incentives.
• Focus on under‑covered micro, small, and mid‑cap firms for edge.
• Prioritize management quality and alignment over extensive financial modeling.
• Use top‑down industry trends to select high‑quality, cash‑flow businesses.
• Leverage AI to hold management accountable and validate guidance.

Summary

The Planet Micro Cap podcast features Leo Trudel, co‑founder of Aurelion Research, outlining a philosophy that merges research and portfolio ownership. By publishing the same stocks they hold, Aurelion removes the traditional sell‑side bias and offers investors a transparent, replicable model via their Pluto platform.

Trudel emphasizes seeking mispriced opportunities in under‑covered micro, small and mid‑cap companies, where management quality and alignment become the primary moat. He argues that free cash flow, not adjusted EBITDA, drives valuation, and that AI tools can continuously test management’s past guidance against real results.

Key examples include a 120% portfolio gain over ten months, a disciplined avoidance of heavy screening in favor of direct management dialogue, and a focus on industries with clear price floors—such as tankers—where market overreactions create buying opportunities.

For investors, the approach demonstrates that aligning research incentives with capital allocation can generate outsized returns while reducing reliance on biased sell‑side reports, offering a repeatable framework for alpha generation in the micro‑cap arena.

Original Description

In this episode of the Planet MicroCap Podcast, I spoke with Leo Trudel, Co-Founder of Aurelion Research, to dig into his global, top-down approach to finding mispriced companies across micro, small, and mid-cap markets - and why he built a firm where the research and the portfolio are one and the same.

We break down his obsession with free cash flow over adjusted EBITDA, how he uses AI to hold management teams accountable to years of past guidance, why tankers may still be more compelling than people think, and his contrarian take on where the AI capex buildout is headed. We mention several companies and sectors during this conversation, and I'm not a shareholder in any of them.

For more information about Aurelion Research, please visit: https://aurelionresearch.com/

Chapters

00:00 Introduction to Leo Trudeau and Aurelion Research

01:58 Leo's Investment Journey and Philosophy

06:42 The Aha Moment: Founding Aurelion Research

08:37 Defining Mispricing in Investments

10:57 Top-Down Approach to Investment Selection

13:05 Identifying Quality Companies in Trending Industries

15:16 Navigating Mispricings and Investment Philosophy

18:52 The Importance of Cash Flow Over Adjusted EBITDA

22:55 Red Flags in Accounting Practices

23:56 Finding Opportunities in Crowded Industries

28:10 The Shipping Industry's Demand Surge

31:02 Navigating Chemical Market Challenges

32:20 Timing and Sentiment Indicators

36:56 Evaluating Management: Green and Red Flags

41:53 Qualitative Due Diligence: Real-World Insights

47:14 The Power of Being Contrarian

50:35 Evolving Beliefs: Lessons from Experience

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This presentation is for informational purposes only and should not be construed as a recommendation to purchase or sell any security referenced herein. Planet MicroCap Holdings LLC and MicroCapClub LLC (collectively, “we” or “our”) are not licensed brokers nor registered investment advisors. We, our partners, contractors, members, subscribers, guests, or affiliates may or may not hold positions in one or more of the securities mentioned in this presentation and may trade in such securities at any time. We may have received cash compensation from one or more participants for presenting at past, present, or future events. We recommend you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities referenced in this presentation.