Royce & Associates was founded by Chuck Royce in 1972. The fund tends to invest in mid-cap and small-cap companies which it believes are underpriced, and since stocks in this value range are often ignored by analysts and other large investors Royce’s picks can serve as something of a screen for smaller-cap stocks that an investment team approves of. Check out Royce's most recent stock picks. Royce recently filed several 13Gs with the SEC, disclosing recent increases or decreases in some positions that represent (or represent) a large portion of the company’s shares outstanding. Here are three stocks that Royce & Associates was buying:
The fund added to its position in FARO Technologies, Inc. (NASDAQ:FARO), a $590 million market cap company which manufactures measurement and imaging systems for use by automobile, aerospace, and equipment manufacturers. On average over 100,000 shares have been traded per day in the last three months, and the current stock price if about $35 per share. As might be expected from its customer base, FARO is tied closely to the overall economy and the stock has a beta of 2.3. Joel Greenblatt had a small position in FARO at the end of the third quarter (see Greenblatt's favorite stocks). The stock trades at 24 times trailing earnings, though in the third quarter the company’s revenue decline 6% and its earnings fell 43% versus a year earlier. Meanwhile, one of the largest scientific and technical instrument companies, Agilent Technologies Inc. (NYSE:A), has a trailing P/E of only 12 and has actually been seeing better numbers on the bottom line. We think it, and potentially other companies in the industry, are better values than the struggling FARO.