4
7
3
5
6
1
8
2

Small Cap Value Plus

Process

Factor-Based Analysis
Our process begins with factor-based analysis that winnows the universe to the most attractive candidates for fundamental evaluation.
  • Higher quality – High ROE and strong balance sheet
  • Higher growth – Positive historical growth of sales, earnings, cash flows, and dividends
  • Lower valuation – Below-average P/E and above-average yield
Fundamental Research
Fundamental research constitutes the vast majority of the investment team’s efforts, with portfolio managers evaluating every company for consideration in the portfolio. The objective, which is achieved through rigorous analysis and spirited debate, is to evaluate each company’s ability to generate growth in sales, earnings, cash flows, and dividends, as well as the sustainability of its business model and potential risks.
small cap value plus
  • Over time, yield plus growth should approximate total return
  • Our rigorous fundamental research focuses on two critical items:
    1. Sustainability of the company’s business model and potential risks. 
    2. The ability of the company grow.
Research Area

Focus
Competitive Landscape
  What industry dynamics affect the company?
Operational Performance
  Does management have a history of effective executions?
Leverage
  Will a heavy debt load impair the business in a downturn?
Return on Equity
  Does the company earn enough to return capital to shareholders, pay down debt, and reinvest in the business? 
Management Philosophy
  Does management have a history of successful capital allocation? 
Price Momentum and Short Interest   Is the market telling us something about the company’s prospects?
Earnings Surprise and Revision
  What is the near-term outlook?

Portfolio Construction
Portfolio managers collaborate to construct a diversified portfolio that manages risk at multiple levels.
  • Individual positions initiated between 0.75% - 1.25%
  • Diversified portfolio typically holding 80 – 120 positions
  • Sectors limited to 30% weighting
  • Limited exposure to Utilities, REITs and Financials
small cap value plus
Our weighted average market cap ranges from $2.5 – 3.0 billion, which is in-line with the average small cap manager.

We eliminate MLPs, preferred stocks, and convertibles to ensure investors receive true small cap exposure without esoteric instruments that may cause tax complexities or introduce additional risks.

Sell Discipline
The sell process is also driven by consensus among the portfolio management team, and focuses on valuation, company fundamentals, and portfolio considerations.

We evaluate each holding versus our initial investment thesis in making sell decisions.
  • Valuation
    • Trailing and forecasted P/E ratio well above market
    • Yield well below market
  • Increase in business, financial or management risk.
    • Deterioration in business fundamentals
    • Entrance of new competitors
    • Regulatory / legal concerns
    • Change in capital structure
    • Management turnover
    • Dividend cut
Portfolio considerations may also prompt the sale of a holding
  • Security’s weight in portfolio
  • Industry or sector constraints
  • Market cap considerations
 



     
         
WHAT'S HAPPENING

Walk to Cure Arthritis
  Join us for the 2017 Walk to Cure Arthritis on Sunday, May 21, 2017. If you or your family/friends are interested in participating (or donating), CLICK HERE to join Opus Capital’s team.  There is no cost to participate!                      
  MEET OUR TEAM

Debra Gordon
  Debra Gordon
Director - Marketing
and Client Relations

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John A. Ferguson, CFA
  John A. Ferguson, CFA
Principal
and Portfolio Manager

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  Nathanael A. Stewart, CFA
Associate Portfolio Manager
and Research Analyst

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

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

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

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Michael R. Knapke
  Michael R. Knapke
Manager - Marketing and 
Client Relations

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Matt Mautino
  Matt Mautino
Operations Support

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B. Rapking - Operations Associate
  Brad J. Rapking
Equity Trader

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

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Nathan M. Bailey, CFA
  Nathan M. Bailey, CFA
Associate Wealth Advisor

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David W. Wagner III
  David W. Wagner III
Research Analyst


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

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

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  CONTACT INFO

221 E. 4th Street, Suite 2700
Cincinnati, OH 45202
Office: (513) 621-6787
         
Copyright © 2017. Opus Capital Management. All Rights Reserved