Beware the market darlings
The small cap index is home to hundreds of companies and is a fertile hunting ground for many investors. However, if you were to follow the small cap headlines in the press you'd be forgiven for thinking the universe was limited to just a handful of stocks being propelled by feverish investors chasing growth. Romano Sala Tenna from Katana Asset Management says a number of quality and well established businesses are being overlooked in favour of these market darlings. "We are seeing at the moment consensus investing on a scale that I haven't seen before. If something is hot it is almost becoming self perpetuating. Whilst you can make money and there is still upside from the momentum that is there, I think from a fundamental perspective they are dangerous companies to be investing in where the next 3 - 5 years of growth has already been factored into the current share price." In this short interview Romano highlights some of the sectors prone to 'consensus investing' and shares a few small caps that he believes are being overlooked.