Reese on a Small-Cap with Big Potential

In his latest column for Seeking Alpha, Validea CEO looks at an unloved small-cap stock that he thinks has big upside.

“As Warren Buffett says, the best time to be greedy is when others are fearful,” Reese writes. “And while most investors [have been] shunning Zagg (ZAGG), my Guru Strategies — quantitative models based on the approaches of different investing greats — were issuing a Trade Alert for the Salt Lake City-based small-cap.”

Reese notes that Zagg, which makes electronics accessories, was hit hard after disappointing first-quarter results. But, he adds, “while some of the shortfalls were the result of misfires on new products, a chunk was also due to changes that caused short-term results to suffer, but should help over the longer term.” He examines the company through three strategies that are quite high on Zagg — his Peter Lynch-, Kenneth Fisher-, and Joel Greenblatt-inspired models, which triggered the Trade Alert. “Historically, when a stock has received strong interest from three of my models, it has gone on to gain an average of 7.6% over the next three months, more than tripling the average S&P 500 return of 2.2%,” Reese says. “Such stocks have beaten the S&P nearly 60% of those occasions, with the best single performance involving a return of more than 160% over three months.” The alert for Zagg was issued on May 22 and runs until August 21. Click here to read more about why Reese’s strategies are keen on the stock.