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  • Small-cap earnings are strong, from our viewpoint, in an environment that is working through supply chain and inflationary challenges. Per Bloomberg, 87% of Russell 2000 companies reported earnings with 60% beating sales expectations and earnings estimates (as of 11/12/2021). 
  • Supply chain disruption has negatively impacted the ability of many businesses to procure adequate supplies. Less supply has also led to input cost inflation. Additionally, numerous companies are reporting hiring challenges resulting in wage inflation.
  • Many firms that we have heard from expect these issues to last well into 2022. To the extent they last longer, margins will probably be pressured at most businesses. 
  • Despite these challenges, demand remains strong, the consumer is healthy, and many enterprises have successfully raised prices to combat these issues.
  • Fenimore remains focused on the long term. Some of our small-cap holdings will likely face short-term disruption. Several should find it easier to withstand these shocks and some should actually benefit. Regardless of the current issues, we believe that all our holdings are high-quality and remain positive as it relates to their long-term prospects.    
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  Kevin Gioia, CFA
  Portfolio Manager, FAM Small Cap Fund

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  Before the internet boom went bust in the early 2000s and prior to FAANGs¹ dominating passive investors’ portfolios, one mutual fund strategy found that the most straight forward approach led to creating long-term wealth via investing in great companies.

  This year marks the 25th anniversary of Fenimore’s FAM Dividend Focus Fund, which has outperformed² with a concentrated portfolio of mid-cap names with long-term growth potential. According to the fund’s Co-Manager Paul Hogan, who has managed the fund since its inception, the fund’s strong emphasis on quality rather than riding fashionable market trends is what makes the difference. The fund’s mantra is that of Fenimore Founder Thomas O. Putnam in seeking out investments to make “the train go faster not longer.”

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