The Connors MicroCap Strategy

This strategy is available through Limited Partnership only.

Strategy:

This strategy combines fundamental, bottom-up research and proprietary screening processes on companies and the industries in which they operate. We further our process on select companies through meetings with company management. Our focus for purchase candidates is on companies with market capitalizations under $250 million, though purchases may include companies up to $500 million. We utilize information from a variety of sources including annual reports, company filings, research conferences, Wall Street and independent firm research, third-party database services and proprietary database information. Companies in which we ultimately invest are those that we believe are well managed with a seasoned management team and are financially strong with solid earnings growth potential.

Attributes:

  • High potential return asset class
  • Exposure to less efficient market
  • Long-term firm and manager experience
  • Not appropriate for everyone since returns may be volatile

Like our Small Companies Strategy, this approach is also based upon three, long-held fundamental beliefs:

  1. Small capitalization equities will continue to be among the highest long-term return asset classes of publicly traded securities.
  2. We believe in the ability to capitalize on market inefficiencies through in-depth fundamental research due to a lack of broad research coverage by Wall Street. This is particularly applicable to the companies considered to be “microcap.”
  3. There is greater opportunity to find “undiscovered” companies than in the crowded space of the most commonly followed stocks. There are also more microcap stocks in which to invest relative to those generally considered large cap, thus providing a larger universe of potential investments.