Determining which companies have been repriced appropriately and which companies are still exposed to an earnings revision lower is key to our current research process. From the ground level, we are finding a breadth of companies that fall into both categories.
The sell-off in the small and mid cap equities has created select opportunities and pockets of undervaluation. With the small cap Russell 2000 trading near record-low forward earnings, many of the companies we are buying are fundamentally solid and have had their valuations reset to inexpensive levels.