Chuck Royce is the president, director of investments and portfolio manager at Royce Funds, a $38 billion small-cap investment firm. Royce said in an interview recently that he believes the small-cap index appears undervalued, though he still finds undervalued situations among the thousands of small and medium-sized businesses he has to choose from.
“So I take issue with the idea that the Russell 2000—or any other small-cap index—is the singular measure of what small-cap valuations look like. In these days of ETFs and strong relative results for index-based investing, I think the enormous breadth of the small-cap space has been forgotten to some degree. We hold some stocks that have reached our estimate of their value, but when we look for potential buys each day, we’re still finding names. Their number has diminished, but they’re still out there.”
On Dec. 31, Royce disclosed increasing his stake in three of his existing holdings: Haynes International (HAYN, Financial), Stein Mart (SMRT, Financial) and Support.com Inc. (SPRT, Financial).
Haynes International (HAYN, Financial)
Royce increased his holding of Haynes International by 2.05%, bringing his total holding size to 1,234,972 shares. This represents 10.02% of the company.
Haynes International Inc. was incorporated as a stand-alone Corporation in Delaware in 1987. Haynes International Inc. has a market cap of $660.900 million; its shares were traded at around $53.43 with a P/E ratio of 30.40 and P/S ratio of 1.40. The dividend yield of Haynes International Inc. stocks is 1.70%.
Royce increased his shareholding of Stein Mart by 5.32%, to 4,512,226 shares. This gives him 10.23% interest in the company.
Stein Mart is a national retailer offering the fashion merchandise, service and presentation of a better department or specialty store at prices comparable to off-price retail chains. Stein Mart has a market cap of $615.000 million; its shares were traded at around $13.80 with a P/E ratio of 20.20 and P/S ratio of 0.50. The dividend yield of Stein Mart stocks is 1.10%.
Support.com Inc. (SPRT, Financial)
Royce increased his position in Support.com Inc. by 26.1%, bringing his share count to 4,188,666. The holding approximates 8.06% of the company.
Support.com Inc. has a market cap of $201.100 million; its shares were traded at around $3.81 with a P/E ratio of 21.60 and P/S ratio of 2.40.
Reductions
In the same batch of trades, Royce also reduced his holdings of two companies. He shed 0.67% of his Nanometrics Incorporated (NANO, Financial) stake, retaining 2,334,473 shares. His CRA International (CRAI, Financial) stake he cut by 26.76%, leaving 1,048,111 shares.
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