In our view, current market conditions have created optimal conditions for sellers of underfollowed
small public companies, in which companies in challenged positions are seeing record premiums to market in acquisitions.
Red Oak Partners, LLC manages funds which invest in underfollowed
and mispriced micro and small cap companies.
To start, he's looking where the big money and analysts on Wall Street usually aren't, leading him to focus on smaller, underfollowed
companies based in Louisiana, Mississippi, Texas, Alabama, Georgia and Florida.
To combat these issues, advisors should seek out investment managers who can identify profitable companies with strong asset backing and limited leverage that might be underfollowed
or misunderstood by the market.
"They also are often overlooked and underfollowed
, which means our target sectors tend to offer more inefficiencies and opportunities." But if some plain vanilla defensive investments - whether focused on escapist sins or basic necessities - offer shelter in times of trouble, they also tend to lag a market recovery.
SMALL CAP BUSINESS SERVICES: DAVID GOLD - SIDOTI & CO LLC.
Finally, as a group this area is largely underfollowed
by Wall Street.
His growth-fund picks for budget-minded investors: Nicholas, which buys market leaders at depressed prices and is up 12.63% in 1992 (minimum initial investment: $500; 414-272-6133); Strong Opportunity, a growth-oriented fund that concentrates on solid, underfollowed
companies and gained 17.35% last year (minimum investment: $1,000; 800-368-3863); and Twentieth Century Select, which lost 4.43% in 1992 but out-paced the Standard and Poor 500 stock index by 4.81% percentage points over the last 15 years by snapping up dividend-paying stocks in fast-growing industries (minimum investment in an automatic payment plan, $25 a month; 800-345-2021).
The team, with an average of more than 28 years of investment experience, focuses on intensive, fundamental, bottom-up research to pinpoint underfollowed
and undervalued small-cap companies in an effort to identify catalysts that may drive an increase in a stock's price.