BI Investor of the Month: This small-cap fund manager is crushing the S&P 500 over the last year
Finding high-upside opportunities in devalued areas is the holy grail of investing. But it's easier said than done.
Unless you're Ryan Jacob, manager of the Jacob Small Cap Growth Fund (JSCGX).
He doesn't focus on any specific sectors or themes, instead opting to focus on the qualitative attributes of a company. Is its management team good? Do its products have a competitive advantage? Are its customers obsessed with its products?
It's an approach that's driven impressive performance in the month of June, returning 7.3% through last Thursday's close, making Jacob BI's Investor of the Month for June.
Jacob has also been dominating over the past year, nearly doubling the S&P 500 's 12% return over the period, and beating benchmark small-cap ETFs by even more.
Always one to cover all bases, Jacob also looks at quantitative measures like cash flows, valuations, and balance sheets.
"We're just constantly really trying to throw as much as we can into the funnel," Jacob said.
"It's not a high hit rate" as to which stocks eventually end up in the fund, Jacob continued, "but we're able to kind of uncover specific situations that we think meet our criteria."
As of April 30, the top five holdings in the fund included: OptimizeRx (OPRX) at a 7.7% weighting; Alphatec (ATEC) at 6%; Heron Therapeutics (HRTX) at 5.9%; Powerfleet (AIOT) at 5%; and Zillow (Z) at 4.6%. Sector-wise, the fund is most concentrated in technology (22.5%), industrials (21.6%), and healthcare (19.8%).
As an example of the kind of unique opportunity that draws Jacob to a stock, he invested in spinal surgery company Alphatec because of the CEO, Pat Miles, who the firm brought on in 2017. Previously, Miles had a successful 16-year run at competitor NuVasive, serving in roles like chief operating officer and vice chairman.
"If you just looked at the financial profile of Alphatec, it wouldn't really tell the story," Jacob said. "The story was them being able to attract this new CEO that had high standing in the industry and would be able to attract a lot of talent and really put them on the map as a real player."
While JSCGX has posted strong performance over the last year, small-caps in general have been left in the dust by their larger counterparts since the Great Recession in 2008. But small-caps have gotten so relatively cheap that they should be due for a turnaround in performance, Jacob said.
"Eventually, small caps won't be in this purgatory that they've kind of had to suffer the last 15, 16 years. But we don't know when that is," he said. "We're kind of long in the tooth here for the kind of market we've been in."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
26 minutes ago
- Yahoo
BI Investor of the Month: This small-cap fund manager is crushing the S&P 500 over the last year
Ryan Jacob of Jacob Asset Management is BI's Investor of the Month for June. Jacob's fund, JSCGX, focuses on identifying unique small-cap opportunities. JSCGX has returned 22% over the last 12 months, beating the S&P 500. Finding high-upside opportunities in devalued areas is the holy grail of investing. But it's easier said than done. Unless you're Ryan Jacob, manager of the Jacob Small Cap Growth Fund (JSCGX). He doesn't focus on any specific sectors or themes, instead opting to focus on the qualitative attributes of a company. Is its management team good? Do its products have a competitive advantage? Are its customers obsessed with its products? It's an approach that's driven impressive performance in the month of June, returning 7.3% through last Thursday's close, making Jacob BI's Investor of the Month for June. Jacob has also been dominating over the past year, nearly doubling the S&P 500's 12% return over the period, and beating benchmark small-cap ETFs by even more. Always one to cover all bases, Jacob also looks at quantitative measures like cash flows, valuations, and balance sheets. "We're just constantly really trying to throw as much as we can into the funnel," Jacob said. "It's not a high hit rate" as to which stocks eventually end up in the fund, Jacob continued, "but we're able to kind of uncover specific situations that we think meet our criteria." As of April 30, the top five holdings in the fund included: OptimizeRx (OPRX) at a 7.7% weighting; Alphatec (ATEC) at 6%; Heron Therapeutics (HRTX) at 5.9%; Powerfleet (AIOT) at 5%; and Zillow (Z) at 4.6%. Sector-wise, the fund is most concentrated in technology (22.5%), industrials (21.6%), and healthcare (19.8%). As an example of the kind of unique opportunity that draws Jacob to a stock, he invested in spinal surgery company Alphatec because of the CEO, Pat Miles, who the firm brought on in 2017. Previously, Miles had a successful 16-year run at competitor NuVasive, serving in roles like chief operating officer and vice chairman. "If you just looked at the financial profile of Alphatec, it wouldn't really tell the story," Jacob said. "The story was them being able to attract this new CEO that had high standing in the industry and would be able to attract a lot of talent and really put them on the map as a real player." While JSCGX has posted strong performance over the last year, small-caps in general have been left in the dust by their larger counterparts since the Great Recession in 2008. But small-caps have gotten so relatively cheap that they should be due for a turnaround in performance, Jacob said. "Eventually, small caps won't be in this purgatory that they've kind of had to suffer the last 15, 16 years. But we don't know when that is," he said. "We're kind of long in the tooth here for the kind of market we've been in." Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
42 minutes ago
- Miami Herald
Filthy Rich Animal's Question of the Week: Big Dogs vs. Small Dogs in the S&P 500
Are you reading TheStreet Pro's Filthy Rich Animal? If not, Filthy Rich Animal is TheStreet Pro's newsletter for newer investors. We're here to help you get started and to keep you going as you get closer to retirement, and beyond! Each week we publish two articles, using as little financial jargon as possible. One article will be actionable: It helps you become a better investor. The other is educational: We call it the Question of the Week, which I'm also sharing below. So, if you'd like content like this sent directly to your email inbox, subscribe here. Kate looks at what retirement investors are doing wrong and offers smarter ways to keep their portfolios strong during those years that they're spending and not saving. Jason examines the S&P 500. You're probably invested in it through ETFs and mutual funds, but do you know what makes it go up or down in value? Find out in the Question of the Week, a large portion of which is reprinted below. Read on! Given the number of people who read Filthy Rich Animal each week, there's a good chance that you and I have never met. However, there's a good chance that I could still name the stocks that have the biggest sway over your retirement portfolio. Related: Dave Ramsey has blunt words on spending money to keep a dog alive That's because most of you probably have the bulk of your stock market holdings in some kind of fund, like an ETF, that invests in the S&P 500. And that's not a bad thing! It means that you are probably diversified. The largest company in the index is Nvidia (NVDA) . It has a market capitalization of around $3.8 trillion. That's big, especially considering that the total value of every company in the S&P 500 is about $55 trillion. The S&P 500 pits the big dogs against the little dogs. Bigger stocks like Nvidia hold greater sway over the performance of the index than smaller companies like Norwegian Cruise Line (NCLH) or soup maker Campbell's Co. So, when Nvidia gains but the other companies are flat or even fall in price, the S&P 500 is still likely to go higher. Shutterstock-Mariya Kuzema Keep that in mind as you answer this week's question, which requires you to do a little bit of math. But I promise that the answer won't be too mathy. If on Monday, Nvidia stock went up by 10% and every other stock in the S&P 500 was unchanged, how much would the S&P 500 Index change by? 10%0.02%0.68%Dunno Before I give you the answer, here's what you need to know about the S&P. As I said above, the 500 companies that make up the index are not weighted equally. The larger ones have a greater weight and, thus, greater impact on the up and down swings in the index. So, graphics- and AI-chip maker Nvidia, which is one of the largest companies, will have a bigger impact than a smaller company, like Campbell's. (CPB) In fact, Nvidia, with its $3.8 trillion market cap, is actually 6.8% of the value of the entire S&P 500! Said another way: Nvidia's weight in the S&P 500 is 6.8%. So, when Nvidia goes up by 10% in a day, it adds 0.68% to the value of the S&P 500. I discuss this in much more detail over on Filthy Rich Animal in: Question of the Week: The S&P 500 Pits the Big Dogs Against the Little Dogs If you enjoyed this piece, please subscribe to our free newsletter, here. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
an hour ago
- Yahoo
Billionaire John Calamos says he's bullish on stocks and the economy — and won't follow Warren Buffett off stage yet
John Calamos told BI he's "pretty positive" about stocks and doesn't expect a recession. The billionaire investor said Trump's tariffs are causing uncertainty but could pay off long term. Calamos is in his mid-80s but has no plans to follow Warren Buffett in stepping down. John Calamos issued a cheery outlook for stocks and the economy, and ruled out following Warren Buffett in stepping down anytime soon. The stock market is "coming back very, very well, so I'm pretty positive on that," the billionaire founder and chief investor of Calamos Investments told Business Insider this week. The benchmark S&P 500 has rallied more than 23% from its April low to trade at record highs as of Friday morning. Technology stocks like Tesla and Nvidia may be trading at heady valuations, but Calamos said he doesn't see any parallels to past bubbles such as the dot-com boom, which ended with a devastating crash. Calamos said it's "very difficult to predict something like that's going to happen," so instead he focuses on setting up portfolios that provide protection against risks like that. The convertible-bond pioneer said he expects volatility and uncertainty in markets to persist for a while, in part because President Donald Trump's tariffs are clouding the global outlook. However, he expects those import taxes to eventually lead to better trade deals for the US that will be "positive, longer term." Calamos also said the Trump administration's fiscal policy is "going in the right direction." The president's "big, beautiful bill" — which is working its way through Congress — proposes significant tax cuts funded in part by reduced spending on entitlement programs. The veteran investor said he doesn't anticipate a recession, and inflation has "really come down," paving the way for more interest-rate cuts that promise to ease pressure on consumers and businesses and boost economic growth. Calamos started investing as a teenager, spent time working as a stockbroker, and quit to set up his own firm in 1977 after growing tired of being told what to do. Buffett took control of Berkshire Hathaway almost a decade earlier, in 1965. Calamos said the "Oracle of Omaha" was firmly on his radar. "Oh yeah, I respected him and what he was doing a lot," he said. Buffett, who turns 95 in August, announced in May that he intends to step down as CEO at the end of this year. Calamos said he doesn't plan to leave his post anytime soon. "Well, see, I'm not that old," he joked, pointing out that he's about a decade younger than Buffett. "I'm having a birthday next month, I'm going to call it the new 65." Read the original article on Business Insider Sign in to access your portfolio
