The North Star InvestCast Brooke Kuby

This episode thoroughly analyzes the small-cap real estate sector, REITs in particular, during periods of rising inflation and interest rates. Eric Kuby, CIO of North Star, is joined by Sr. Analyst Jim Lane and Analyst Brooke Kuby to discuss. Their research uncovers the merits of Equity REITs with short duration leases, as well as companies with higher PP&E to enterprise value ratios. Given the uncertain economic environment and recent turbulence in the global economy, this may be a timely sector. At the end of the episode, Brooke interviews Andrew Spodek, CEO of Postal Realty Trust (PSTL), to examine PSTL's differentiated strategy. 

To read our research, please visit this website: https://nsinvestfunds.com/wp-content/uploads/2022/12/Real-Estate-White-Paper_FINAL.pdf

Our next episode will cover small-cap technology companies. To submit a question or other inquiry, please email info@nsinvest.com. 

This episode breaks down how North Star analyzes healthcare companies. Everyone routinely experiences health care through dental, medical, or mental health care services, thus classifying this as an extremely relatable industry. However, healthcare stock valuations can be challenging for value investors. Such investors are likely to invest in out-of-favor, but well-capitalized yet under-earning businesses. To avoid value traps, it is crucial to study the various subindustries, differentiated business models, and positive or negative regulatory catalysts.

The small-cap basic materials sector, although few in number of publicly traded companies, has exhibited solid historical performance and is well-positioned to participate in both the growing global economy and benefit from use in necessary technological advances. Bottom-up analysis will be necessary given the cyclicality of many materials companies, as well as due to the tendency of high-demand materials industries to quickly be overcapitalized which can rapidly reduce margins and returns to investors. However, compelling investment opportunities in niche companies with seasoned management teams, stable margin profiles, and appropriate capital structures can be identified amongst small-cap metallic and non-metallic materials companies.  

Inflation Mitigation...Utilities Outshine Energy
After generating data going back 20 years, interesting themes emerged. As clean energy becomes more prominent for both generators and providers, the lines become blurred between Small Cap Utilities and Small Cap Energy sectors. Unlike large-caps, historically, small-cap utilities fared quite well during rising interest rate periods. Lastly, unlike large-caps, historically, small-cap energy stocks too fared well during rising interest rate periods, although outperformance to large-cap peers was less consistent.

Hidden in Plain Sight
ESG-Positive Opportunities Within Small-Cap Industrials
Investors have been willing to pay aspirational valuations for companies that participate in the #ESG mega-trend. Hiding in plain sight are many small-cap Industrial companies that are trading at "bargain" prices and could be major players in the shifting ESG landscape.

Eric Kuby, Chief Investment Officer, is joined by Brooke Kuby, Analyst, to discuss.

The next episode in the Small Cap Bootcamp™ will be evaluating the Utilities and Energy sectors. Please submit your questions to info@nsinvest.com.

Perception vs. Reality - Why Interest Rate Concerns Frequently Drive Unnecessary Rotations Among Equity Market Capitalization Categories
There is a common misperception that small and micro-cap stocks are adversely affected by rising yields. Looking back at data over the last 30 years may prove otherwise. Once again small and micro-cap stock prices are trending higher and as such Eric Kuby (Chief Investment Officer) is joined by Brooke Kuby (Analyst) to discuss the micro and macro attributes of companies in this asset class and how they may fair during another period of rising yields.

In the second half of the episode, Eric and Brooke tackle the second sector in the Small Cap Bootcamp™ series: the Consumer Discretionary sector. This group includes retailers and e-tailers, media and entertainment companies, and restaurants. Listeners will learn how this sector has performed over time compared to the broad Russell 2000 Index, what valuation metrics and methodologies are relevant to consumer-centric stocks, and how North Star tracks niche macroeconomic indicators -- such as Country Music Radio popularity -- to develop a deeper understanding of various end-markets.

The next episode in the Small Cap Bootcamp™ will be evaluating the Industrials sector. Please submit your questions regarding any sector to info@nsinvest.com.