- By James Li
On June 30, small-cap investor Chuck Royce (Trades, Portfolio) reduced his UniFirst Corp. (UNF) position by 21.25%. Additionally, the portfolio manager of Royce Pennsylvania Mutual Fund exited his position in Fuel Systems Solutions Inc. (FSYS), selling his 1.39 million shares at a price of $5.40.
Royce and his investment strategy
A pioneer of small-cap investing, Royce has managed the Pennsylvania Mutual Fund portfolio since 1972. The Columbia University M.B.A. graduate chooses stocks based on an investment strategy focusing on style, market cap and volatility. For his fund, Royce prefers small-cap stocks that have below-average volatility and attractive/sustainable returns on invested capital.
Using the All-in-One Guru Screener, GuruFocus users can generate a screener based on Royce's investment strategy. A sample "Chuck Royce (Trades, Portfolio) Screener" contains the following filters:
- The company's market cap is less than $2 billion (since Royce's fund only considers small-cap stocks).
- The ROIC (10-year median) is greater than 15% (attractive/sustainable returns on invested capital). Additionally, the ROIC must be greater than the WACC.
- The company's beta is between 0.4 and 0.8 (below-average volatility).
Among U.S. stocks, 69 of them meet all of the above criteria and thus are potential buys based on Royce's investment strategy.
Customizing filters
With over 120 filters, the All-in-One Guru Screener provides a comprehensive tool to find stocks based on certain criteria. However, users are not limited to these filters.
New feature alert: One of the tabs on the screener contains the word "Customized." As the name suggests, this tab allows users to customize their filters and screen for stocks with the user-defined filters. To create a new filter, simply click on the blue "Create new filter" button located on the left side of the screen.
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See also
GuruFocus users can view the latest guru picks by clicking the topmost item on the "Gurus" tab. The two types of updates offered are quarterly picks and real-time picks, which is only offered to Premium members. Additionally, Premium members can access more gurus, like Royce, than free members. Premium Plus members have further access: They can view 13F, 13D and 13G investor information. Users are encouraged to sign up for a free trial for Premium and/or Premium Plus and get investment ideas from gurus.
Disclosure: I currently do not own any stocks discussed in this article.
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This article first appeared on GuruFocus.