The 2016 Idea Generation Conference is over, but the best ideas from its presenters are still valid.

With the backdrop of uncertainty over Federal Reserve interest rate policy and fear in the markets, many of the best ideas had to do with rigorous research, solid fundamentals, and above all, value investing.

In the beleaguered small-cap space, Jim Gentrup of Val Vista Capital Management, said his firm uses both quantitative and qualitative bottom-up analysis to find stocks that can produce capital appreciation while maintaining liquidity. His top choices tend to be in the medical device, healthcare, tech and software sectors. They include Natus Medical Inc. (BABY), Autobytel Inc. (ABTL), which is currently trading at 13x current free cash flow, Super Micro Computer, Inc. (SMCI) and TechTarget, Inc. (TTGT).

Scott Davies of CDAM, a firm focused on preserving capital and delivering consistent returns regardless of market conditions, favors Apollo Global Management LLC (APO) because he believes that it’s ready to deploy some $29 billion in cash is has stockpiled to scoop up distressed opportunities. That way it should shift its revenue from the 66 basis points in management fees it makes on 96% of its assets to greater performance-based fees. He said that the company fits in with its goal of being anti-cyclical.

When asked about beleaguered financial stock, Kathryn Schwartz of Pawleys Capital Management suggested Access National Corp. (ANCX), which focuses on underserved segments. The best idea of Brett Hickey of Star Mountain Capital follows the same theme; he serves the U.S. small business market — an established but underserved financial market — with collateralized loans.

Kevin Carter from Big Tree Capital took attendees to some emerging markets options, many of which focused on the rise of smartphone in China, India, Africa and South America. He is a fan of Flipkart Ltd., which some call ‘The Alibaba of India,’ and, called ‘The of Nigeria.” He also likes Arcos Dorados Holdings, Inc. (ARCO), the largest McDonalds Corp. franchise in the world, as well as Hong Kong-traded Macau casinos Wynn Macau Ltd. (1128.HK) and Sands China Ltd. (1928.HK). He warned, however, that most ETFs tend to overallocate to more established, liquid markets such as Taiwan or South Korea over places like India, so look closely.

Mitchell Sacks of Grand Slam Asset Management is a big fan of Trecora Resources (TREC), a specialty petrochemical manufacturer, for its strong recurring business, minimal competition, quality management and solid balance sheet.

As for value vs. growth investing, Joel Hirsch of Kovitz Investment Group, said “in general, value outperforms over time,” quickly adding that “the last 10 years have been horrible for value investors, mostly due to the last two years.”

‘Growthy’ Ideas, Too

Michael Kramer, founder of Mott Capital Management, is a proponent of long-term thematic growth investing, and by “long-term,” he means four to five years. He utilizes qualitative research and monitors global population and demographics shifts. His favorite idea is ACADIA Pharmaceuticals Inc. (ACAD), which he said is close to a pivotal FDA decision on a Parkinson’s disease treatment drug.

The Big Picture

Several speakers speculated that a new reality of low economic growth could mean that active management could come back into favor.

“When you own an index fund you own the good, the bad and the ugly of that index,” said Schwartz.

Bill Ehrman of Paix et Prosperite Funds might have summed it up best when he said “don’t buy the market; buy stocks.”

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