After small caps have stayed behind the S&P 500 for a long time, portfolio manager Josh Wein sees good prospects for shares of smaller and medium-sized US companies.
• Josh wine from Hennessy finds overlooked shares
• Small caps could become giants
• also possible takeover
The topics of artificial intelligence and interest policies have been determining the headlines for some time. But Josh Wein, portfolio manager of the $ 516 million Hennessy Cornerstone Growth Fund, believes that there is also great potential for investment opportunities.
Collect small caps
After they have been niche for years, small and medium -sized companies have recently been given more attention among investors. The Russell 2000, which is made up of the smallest 2,000 companies in Russell 3000 in the past three months, climbed by 12.27 percent, while the S&P 500, which reflects the wide US stock market, only attracted 8.19 percent (as of September 26, 2025).
Morningstar indices also show that value shares exceeded growth shares, small caps left large companies behind them and international markets performed better than the US market. The investors seem to avert the dominant technology stocks, including companies of the “Magnificent Seven”.
The recent key interest rate of the US Federal Reserve could increase this dynamic, because small caps usually benefit more from interest reductions than large caps. This is due to the fact that they are often more dependent on bank loans, whereas large caps have more access to bonds and other financing methods. In addition, small caps often identify a higher sensitivity to economic cycles. Interpretation stimulates the economy, which can lead to a higher demand for its products or services.
But Josh Wein sees other arguments that speak for small caps: “In some cases you have the potential that you have the potential [ein kleineres Unternehmen] At some point a larger company becomes, “he argues” Marketwatch “.
The expert recommends this stock
The expert also listed “small/medium -sized companies that, in his opinion, are currently flying under the radar.
Weis Markets, a food chain from Pennsylvania, which has around 200 shops, is a defensive title, for example, “which is of central importance for every economy and fulfills our criteria in terms of dynamics, evaluation and earnings growth,” said the portfolio manager.
In addition, he refers to root, a technology-based vehicle insurance provider, “who use data from a person’s mobile phone using data [kann]What for a driver the person is and can adapt the price of a policy accordingly, “said wine, adding:” I think root is a beautiful growth story, “said wine.
Most recently, he counted the Compass real estate agent platform. He sees this as a potential beneficiary when real estate prices begin to reach the valley sole.
Takeover possible
In his selection, it is “small/medium -sized companies that fly under the radar. Together all three shares mentioned also have that they” were potential takeover candidates for strategic or financial buyers “due to their favorable evaluation and market positioning.
Editor finance.net
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