No stone unturned: Capstone discovers good ideas in unlikely places. (Research Profile).

Buyside, May, 2003 by Chensvold, Christian M.

Capstone Investments

There's a very good reason San Diego's Capstone Investments has its research department located in "balmy" Milwaukee, says Vice President and Director of Research Jason Diamond. "The weather is so bad, all we do is work."

The five-man research team (with one more in Arizona), focuses that work on ferreting out small- and micro-cap companies with nothing but upside ahead of them. It's a strategy that works: The team has had a positive record the past two years, and is up so far this year as well. "Small and micro caps tend to perform better in bear markets. We have a bottom-up approach, so we're looking for small companies that are underfollowed. They don't have a broad base of business, so it's very easy for them to grow.

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