4 Micro-Cap Opportunities: Bill Hench on TheStreet
article 11-17-2015

4 Micro-Cap Opportunities: Bill Hench on TheStreet

Watch the video

By clicking the above link, you'll leave this site and go to a third-party website. Royce does not endorse and accepts no responsibility for content on third-party sites.

The recently volatile market has been tough on micro-cap stocks, which in some cases has created compelling bargains. Portfolio Manager Bill Hench sat down with TheStreet’s Gregg Greenberg recently to discuss four micro-cap companies whose valuations and/or prospects for profitability look attractive to him right now.

“If things like the employment numbers continue to improve and interest rates remain low then stocks like this, with very low multiples, should do well,' said Bill.

He also discussed how an overall stronger economy, rising interest rates, and lower energy prices could all mean good things for portfolio holdings in such wide-ranging industries as trucking and transportation, media, and homebuilding.

He gave Swift Transportation as an example of a company that had endured some steep declines of late but looked well positioned to benefit from a steady economy. The McClatchy Company is a media business that Bill believes has successfully transitioned from primarily print to mostly digital but has yet to convince investors of its successes on that, and other, fronts.

Bill also pointed out that in the last of these industries, companies building more expensive, higher-end homes had the early advantage but recent signs of a shift gave him confidence that Beazer Homes would recover.

Finally, he and Gregg discussed the success that TRC Companies, a large engineering and construction firm, has experienced so far in 2015.

Bill Hench joined the firm in 2002 and has 23 years of investment industry experience. He serves as portfolio manager for Royce Micro-Cap Opportunity Fund and Royce Opportunity Fund (with lead portfolio manager Buzz Zaino). He also serves as an assistant portfolio manager for Royce Low-Priced Stock Fund.

Watch the interview at TheStreet.com

Important Disclosure Information

Bill Hench is a Portfolio Manager of Royce & Associates, LLC, investment adviser to The Royce Funds. He serves as portfolio manager of Royce Micro-Cap Opportunity Fund and Royce Opportunity Fund. He also serves as assistant portfolio manager of Royce Low-Priced Stock Fund. The thoughts and opinions expressed in this piece are solely those of the person speaking and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements.

This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing or sending money. Investments in securities of small-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see "Primary Risks for Fund Investors" in the prospectus.)

Percentage of Fund Holdings as of 9/30/15 (%)

  Swift Transportation (SWFT) The McClatchy Co. Cl (MNI) A Beazer Homes (BZH) TRC Companies (TRR)
Micro-Cap Opportunity 0.00 0.36 0.76 1.69
Opportunity 0.24 0.18 0.34 1.09
Low-Priced Stock 0.00 0.00 0.00 0.00

There can be no assurance that any of the securities mentioned in this piece will be included in these portfolios in the future. References to specific securities in this piece are not intended as recommendations and should not be relied upon as the basis for anyone to buy, sell, or hold any security.

Share:

Subscribe:

Sign Up

Follow: