Hedge fund guru Joel Greenblatt says he’s seeing a wide disparity in the way the current market values large stocks and small stocks.
In his latest Nasdaq.com column, Validea CEO and The Guru Investor author John Reese looks at some small-cap bargains he’s finding in the market. “Since the stock market began to turn lower two months ago amid renewed fears about the European debt crisis, small-cap stocks have fared worse than their larger peers,” Reese writes. “It shouldn’t be a surprise — often when fears hit and the market falls, investors lean toward stocks of larger companies,… Read More
Small-cap growth is an area of the stock market that would seem to imply frequent trading and extra risk. But Jeff Cardon, whose Wasatch Small Cap Growth Fund has been one of the best performers in its class for more than a decade, has built a strong track record without high turnover or added risk. “That’s how I judge whether I’m being careful,” Cardon tells Forbes magazine in saying that only 12% of his portfolio… Read More
In an interview with WealthTrack’s Consuelo Mack, top fund manager Chuck Royce discusses why small-cap stocks provide an “evergreen universe” of opportunity. Royce talks about how to reduce volatility in a small-cap portfolio, and why he thinks higher-quality, dividend-oriented stocks are going to take leadership over higher-risk stocks, which have thus far led the bull market. Royce also says he thinks the broader market will return 6% to 9% per year, on average, this decade.
One of the many impacts of last year’s market meltdown was the huge shakeup to stocks’ style box classifications. With most stocks losing a quarter to half of their value — and some of the largest companies being decimated — definitions for “large-cap”, “mid-cap”, and “small-cap” were turned on their heads. And, writes Investment News’ Jeff Benjamin, that appears to have given smaller money managers and individual investors an advantage over big investment firms. Benjamin… Read More
John E. Deysher, whose Pinnacle Value Fund has outperformed 99% of its peers year-to-date and over the past year, three years, and five years, tells Barron’s that he’s been putting more cash to work, and says to look for a big bounce from small-cap stocks as the economy recovers. “Current stock prices reflect pretty dire economic circumstances,” Deysher said. “But, in general, businesses have been very responsible. They are bringing down inventories. They are paying… Read More
In this week’s Validea Hot List newsletter, John Reese says that his Guru Strategy computer models are finding an array of values among small-cap stocks, particularly among those that would be considered small-cap growth firms. Reese’s Hot List portfolio added eight new stocks on his regularly scheduled rebalancing, all but one of which are in the small-cap growth category — one of the market’s most beaten-down areas of late. For 2008, Reese notes, small-cap growth… Read More