Small Cap Surprise
Financial companies – including alternative asset managers -- represent a corner of the small-cap market worth watching for investors seeking to capture unrealized value, notes Chuck Royce.
Mention “financial companies” to most investors and they typically think of the large banks and asset managers that dominate the news headlines. Yet there are intriguing financial companies in the small cap sector as well – as small-cap pioneer Chuck Royce of Royce & Associates is keenly aware.
One key to evaluating such firms is seeking out solid companies whose share prices may have lagged this year’s strong small cap market amid broader concerns about their area of business.
Example: publicly traded small cap alternative asset managers. While 2016’s market volatility may have caused their stock prices to lag, Royce believes investors are underestimating the long term earnings power of several of these companies. Each company in the space is best judged on its own merits – something that active managers with a bias toward fundamental quality like Royce are well suited to do. http://hvst.co/2bQnIuB
