article 05-04-2017

CNBC PowerLunch: Jay Kaplan on Three Small-Cap Stocks

What does Portfolio Manager Jay Kaplan like about these three small-cap stocks?

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On April 27, 2017, Jay Kaplan talked with host Melissa Lee of CNBC's PowerLunch about opportunities for small-caps amid pending tax reform and a few companies he likes.

Jay describes his outlook for small-caps, "We're in the small-cap space at Royce, so earnings reports tend to come a little bit later but so far so good. The market has priced in a good expectation in reduction of corporate tax rates, which, by the way, are very good for small-cap stocks. Late last year small-cap value started a resurgence, versus small-cap growth. We feel pretty good about small-cap value within the Russell 2000."

Additionally, Jay highlights the strong fundamentals of three companies, including Moelis & Company (NYSE, MC), PC Connection (Nasdaq, CNXN), and Gentex Corporation (Nasdaq, GNTX).

Watch the interview at CNBC.com.

Important Disclosure Information

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. There can be no assurance that a company that currently pays a dividend will continue to do so in the future.

As of 3/31/17, Moelis & Company Cl. A was 2.4% of Royce Small-Cap Value Fund's assets, 0.6% of Royce Total Return Fund's assets, 0.7% of Royce Dividend Value Fund's assets, 0.4% of Royce Pennsylvania Mutual Fund's assets, and 2.4% of Royce Capital Fund – Small-Cap Portfolio's assets.

As of 3/31/17, PC Connection was 2.7% of Royce Small-Cap Value Fund's assets, 0.3% of Royce Total Return Fund's assets, 0.3% of Royce Dividend Value Fund's assets, 0.6% of Royce Pennsylvania Mutual Fund's assets, and 2.7% of Royce Capital Fund – Small-Cap Portfolio's assets.

As of 3/31/17, Gentex Corporation was 2.6% of Royce Small-Cap Value Fund's assets, 1.2% of Royce Total Return Fund's assets, 0.6% of Royce Dividend Value Fund's assets, 0.7% of Royce Pennsylvania Mutual Fund's assets, and 2.6% of Royce Capital Fund – Small-Cap Portfolio's assets.

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.

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.)

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