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We commit the time and resources necessary to find opportunities
within a targeted “sweet spot” of the micro cap
market.
A core tenet of Kennedy Capital’s investment
philosophy is that gaps or lags in the timely delivery and
use of key company information, such as earnings estimates
and restructurings, can lead to the inefficient pricing of
stocks.
Most investment professionals agree that inefficiencies exist
in the micro cap universe, and that these inefficiencies can
create investment opportunities. The challenge for investors
is – how do you systematically and consistently identify
and exploit those opportunities? At Kennedy Capital Management,
we accomplish it by dedicating significant resources to domestic
micro cap equity research. These resources include a large
staff of six portfolio managers, fifteen analysts (with
industry specific expertise), and three equity traders. We
also give these professionals the tools necessary to do intense,
bottom-up, fundamental research.
Armed with the necessary tools, our investment staff goes
to work uncovering investment ideas that many other managers
either overlook or don’t have the resources to uncover.
The first step is to identify potential investment candidates
through our unique screening process. Every day, on a real-time
basis, our analytical staff pours over the quarterly results
issued by virtually every publicly traded micro cap company.
This labor-intensive process is critical in uncovering investments
that are under-followed or out of favor with most investors.
Once the universe is narrowed and potential new buys are identified,
our staff does the intense fundamental analysis critical to
good decision making in the micro cap universe.
Kennedy Capital Management has the resources
necessary to do independent fundamental analysis and in-depth
research on underfollowed companies in every sector of the
U.S. economy.
Our research analysts manually screen thousands
of micro cap company earnings reports every quarter to find
those with strong fundamentals, yet low institutional ownership
and analyst coverage. We then personally meet with many of
these companies to hear their stories firsthand.
This is an extraordinarily labor-intensive and
time-consuming process. Our experience has shown it is also
the best way to consistently uncover promising micro cap companies
that are inefficiently priced.
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