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Microcap Value

Philosophy

Opus believes many parallels exist between microcap value investing and horse racing. The market for common stocks is like the pari-mutuel system at the racetrack. Patrons go to the track to bet on horses and the odds change based on those bets – much like the stock market. If someone believes a horse is likely to beat the odds, one will bet on that horse. If all bettors predict a certain horse to win, the odds will reflect that consensus, and the return on investment will be poor. This analogy holds true for the stock market.

With over twenty years of experience, Opus has a history of picking winners, as we have demonstrated superior stock selection by uncovering companies that the market has mispriced. With this experience, Opus believes it has a distinct edge over other bettors in three ways: informational, analytical, and time-horizon.

Microcap Value PhilosophyInformational Advantage
Things get interesting with the inefficient U.S. microcap universe, where more than 20% of companies receive no analyst coverage. Just as in horse racing, large events, i.e., the Kentucky Derby, receive extensive coverage while local tracks receive little to none.

Uncovering and capitalizing on pricing inefficiencies has been Opus’ bailiwick for over two decades.

Analytical Advantage
With deep roots in fundamental research, Opus has an analytical edge in picking winners compared to a person who only bets on horses with the lowest odds. Opus uncovers businesses that fly below the radar before being recognized by the broader market.

Opus’ Microcap Value investment philosophy utilizes the firm’s extensive experience and research within the smaller capitalization space. The Opus Microcap Strategy is rooted in finding companies with the combination of low valuation, high quality, and strong momentum within micro capitalization stocks, an approach that consistently outperforms any single factor on a stand-alone basis.

Time-horizon Advantage
With less liquidity than their small and large cap brethren, microcaps have the chance to outperform for longer periods of time than expected, as they get an incremental buyer pushing the share price up due to a supply imbalance. Horses that make it to the Kentucky Derby start racing at the local tracks, making their way up the ranks from maiden races to stakes races. Much like stocks, which grow from microcap land to small cap territory and beyond, creating “multi-baggers”. Each additional market cap spectrum creates an incremental buyer, boosting a healthy rate of return if invested in the earlier stages.

Opus’ long-term perspective, thinking of the next three to five years instead of quarters, allows us the time to take advantage of this price appreciation.
“Adopt the pace of nature: her secret is patience.”
– Ralph Waldo Emerson
 


Opus Capital Management - Small Cap Value



     
         
MEET OUR TEAM

Adam T. Eagleston, CFA
  Adam T. Eagleston, CFA
Principal
and Portfolio Manager

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Len A. Haussler, CFA, CPA
  Len A. Haussler, CFA, CPA
Founder
and Portfolio Manager

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Alex Moore
  Alex Moore
Associate Wealth Advisor

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Kevin P. Whelan, CFA
  Kevin P. Whelan, CFA
Principal
and Portfolio Manager

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Joseph P. Condren, CFA
  Joseph P. Condren, CFA
Principal, COO and CCO

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Nathan A. Bishop, CFA
  Nathan A. Bishop, CFA
Principal
and Portfolio Manager

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  Jakki L. Haussler, Esq., CPA
Founder and CEO

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David W. Wagner III, CFA
  David W. Wagner III, CFA
Research Analyst


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Nathan M. Bailey, CFA, CFP®
  Nathan M. Bailey, CFA, CFP®
Associate Portfolio Manager

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B. Rapking - Operations Associate
  Brad J. Rapking
Equity Trader and Associate Research Analyst
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221 E. 4th Street, Suite 2700
Cincinnati, OH 45202
Office: (513) 621-6787
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