Matt Arens is CEO, Senior Portfolio Manager and Founder of First Light Asset Management, LLC. Mr. Arens has followed small-cap stocks since 1997, with a particular focus on identifying companies with high growth potential in the health care sector. In his exclusive interview with the Wall Street Transcript, Mr. Arens details some small cap stocks with huge potential.
“Typically, health care trades at a premium to valuations across the broader market, and that’s because it oftentimes delivers superior growth. But in this current environment, we are seeing health care trade at a discount to the normal valuation it’s historically carried…the health care sector should be trading at least at that historical premium to the market…”
One theme that will unleash large returns for small cap healthcare investors is that “additional mergers and acquisitions…greatly benefit our portfolio because the companies we invest in on the drug side of our investments are really finding innovative new therapies that can be very attractive to a large pharmaceutical company as they look to fill out their salespeople’s bags with effective drugs and rely on volume growth as opposed to price increases.”
Mr. Arens also highlights several top picks: “…another name we are very excited about is Immunomedics (NASDAQ:IMMU), which is in the biotechnology space. I think it is a great example of what we discussed before about a company that’s come up with an innovative product that could advance to market and generate significant sales in the future, but it also has the potential to be a very attractive acquisition candidate for a larger company…”
To see all of Mr. Aren’s hot stocks, read the entire interview at the Wall Street Transcript.