Small/mid-cap stocks provide 'more fertile ground,' manager says.

Leith Wheeler's David Slater says these smaller stocks are less followed and are ripe for the picking.

Michael Ryval 17 August, 2017 | 5:00PM
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The U.S. small/mid-cap universe encompasses about 2,500 companies, and because of their smaller size many have a limited analyst following and are ripe for the picking, argues David Slater, U.S. equity analyst at Vancouver-based Leith Wheeler Investment Counsel Ltd.

"All the U.S. indices, small-cap and large, are trading at around 21 times earnings," says Slater, co-manager of Leith Wheeler U.S. Small/Mid-Cap Equity. "Regardless of the price-to-earnings ratio for the indices, we believe, and have found with our Canadian work over the past 30-plus years, that there is often more fertile ground in finding attractively-priced stocks in smaller companies."

Established in 1982, Leith Wheeler offers 12 mutual funds and has $18 billion in assets under management. After developing its expertise in small and mid-cap stocks in its Canadian equity portfolios, the firm decided to launch the U.S. small/mid-cap equity fund last October.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Amazon.com Inc3,454.79 USD-0.60Rating
Starwood Property Trust Inc24.79 USD-0.36
Tri Pointe Homes Inc22.12 USD0.45

About Author

Michael Ryval

Michael Ryval  Michael Ryval, a regular contributor to Morningstar, is a Toronto-based freelance writer who specializes in business and investing.

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