Nancy Prial, CFA, is Co-Chief Executive Officer and Senior Portfolio Manager at Essex Investment Management Company. She is the portfolio manager for the micro, small and smid growth strategies, leading an all-women investment team. Earlier, she worked at Burridge Growth Partners as the Chief Investment Officer and Senior Vice President responsible for the smid and small-cap growth strategies. The Essex Small Cap Growth Strategy was launched and developed by Ms. Prial in 2001 while at Burridge.
In this exclusive 4,113 word interview, Ms. Prial makes the case for the micro-caps at this point in the economic cycle:
“We think both small and microcap is an interesting part of the market to be in, but we really think that the opportunity today in microcap is quite, quite compelling. Part of that is the fact that the microcap stocks have underperformed their small-cap brethren really since 2013. And so we’ve had now five years of fairly significant underperformance by microcap, within a market where small cap frankly has done pretty well. And so we think that that’s something that’s likely to reverse.”
Ms. Prial identifies some examples of her portfolio:
“..These are companies that can be reasonably in control of their own destiny, where a new product or a new area can really change the trajectory of the growth company, but many times, that improvement in their business is not yet fully recognized in the price of a stock. I’m going to talk about a really microcap name here; it’s called Identiv Inc. (NASDAQ:INVE), about an $80 million-market-cap, California-based company, so it’s a U.S.-based company.”
Another portfolio favorite is detailed by Ms. Prial:
“I will mention one more microcap name that we think is particularly interesting right now. This one is a $95 million market cap, so again, very microcap. It’s a company called Tecogen (NASDAQ:TGEN), based in Massachusetts, so again a U.S.-based company. They’ve actually been around for a very long time.
They basically sell co-generation and chiller products.”
Read the entire 4,113 word interview to get the full investment rationale from Nancy Prial, Co-Chief Executive Officer and Senior Portfolio Manager at Essex Investment Management Company.