Small-Cap Fund Manager Beats Market by Targeting Underfollowed Companies with Earnings Surprises
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Ken Farsalas at Oberweis Asset Management has beaten the market by investing in small, underfollowed companies with earnings surprises.
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Farsalas believes most investors exhibit biases that cause them to cling to preconceived notions and underreact to new information like earnings surprises.
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Farsalas finds opportunities by screening for micro- and small-cap companies beating earnings expectations, then evaluating fundamentals.
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The Oberweis funds have significantly outperformed their benchmarks over the past decade, especially in recent years.
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Farsalas believes small caps are poised to outperform as they remain undervalued compared to large caps.