Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Bid.com International (BIDS) -- Ignore unavailable to you. Want to Upgrade?

To: GoNorth who wrote (34186)	7/27/1999 1:48:00 AM
From: hsg	Read Replies (1) \| Respond to of 37507

Bids mentioned in this article... Business Calgary Herald Front Page Thursday 22 July 1999 Templeton rates small caps a buy Mutuals firm favours upside potential of Canadian firms Philip Demont, Calgary Herald TORONTO - Canadian investors, tired of missing out on the soaring U.S. markets, might finally have a reason to smile, say portfolio managers at Templeton Management Ltd. That's because the country's much-maligned small companies appear ready to rise in value this year. "There is value in small-cap companies. Of course, you need more than one announcement or one quarter. But I don't believe this value has been realized," said Peter Moeschter, who manages the mutual fund company's $59-million balanced fund. For the past couple of years, Canadian investors have suffered as the performance of this country's equity markets lagged behind their big U.S. cousins. And small-capitalized companies, defined in Canada as firms with a value in the range of $500 million or less, have been especially beat up here. Many analysts blame Canada's higher real interest rates and slower economic growth for the poor performance. But Templeton's people believe the smaller firms have reached rock-bottom, leaving little risk of further losses and large potential gains. Picking small companies with solid management and a reasonable business should net good returns, Moeschter said Wednesday. One reason for Moeschter's thinking on small caps is that Templeton follows a strategy known as "value investing." Portfolio managers examine a stock according to a number of defined measures, such as the ratio of share price to earnings. Once the stock's value exceeds these various metrics, Templeton sells the shares. One potential down side to this philosophy is that Templeton does not attempt to pick short-term trends in stocks. Less than 15 per cent of the value of Templeton's $540-million Canadian Stock Fund is held in technology or communication firms, obvious beneficiaries of Internet growth. This sector is under the influence of excessive expectations without sufficient earnings to back up the high stock-market valuations, says George Morgan, who runs the Stock Fund. "We haven't bought any of the Bid.Coms. Right now, the industry is overly hyped. We will get our chance to shift through the debris later on," Morgan said.