Small-cap bargains make Cinnamond Stockpicker of the QuarterFont size: A | A | A7:21 PM ET 11/3/08 | Marketwatch RELATED QUOTES
6:34 PM ET 11/3/08 Symbol Last % Chg ICMAX 10.53 -0.75% APSG 18.02 0.00% FDO 26.94 0.00% MOCO 8.94 0.00% PTEN 12.63 0.00% GENC 6.50 0.00% ODC 16.28 0.00% Real time quote.
SAN FRANCISCO (MarketWatch) -- Small companies are often overlooked, unappreciated and hard to understand. That's just how Eric Cinnamond likes them.
"Small-cap companies are really unique," said the manager of Intrepid Small Cap Fund (ICMAX). "Companies like this don't move with the market."
Cinnamond is also upbeat about Gencor Industries (GENC), which produces asphalt for road construction.
The stock has been routed as the U.S. economy sputtered and the outlook for infrastructure and other construction projects darkened. Shares of Gencor finished Monday's session at $6.50; the stock fetched $32.88 in May.
But for a value investor, Gencor is appealing, Cinnamond said.
Gencor's recent $59 million market capitalization values the company at a discount to the cash on its balance sheet, which alone is worth about $8 a share, he noted. Plus, the company owns a parcel of land in Orlando, Fla. that isn't being factored into the share price, Cinnamond said.
In addition, that cash hoard allows Gencor to operate without borrowing, keeping the company financially sound, the fund manager said. And the stock isn't widely covered.
"Most of the companies we follow aren't relying on the credit markets," Cinnamond said. "I'd rather own a company that isn't dependent on the generosity of Wall Street."