Small Cap Strategy in 2024: Ironwood Investment Management LLC’s Approach to Market Opportunities

A Look Back at 2024: Ironwood Investment Management, LLC’s Small Cap Investing Track Record

The Ironwood Investment Management, LLC Small Cap Core Strategy navigated a strong year for U.S. equity investors in 2024. The S&P 500 delivered impressive returns, and the Russell 2000 (R2), which tracks 2,000 small cap U.S. companies, also posted solid gains. These strong performances were supported by a resilient U.S. economy, defying recession expectations. With steady GDP growth, a robust labor market, and moderating inflation, investor sentiment was further buoyed by the Federal Reserve’s pivot from its hawkish stance, including interest rate cuts.

Against this favorable backdrop, Ironwood Investment Management, LLC’s Small Cap Core Strategy (SCC) focused on identifying investment opportunities aligned with its disciplined approach. Below, we explore the key elements of this strategy, as outlined in our recent Q4 2024 commentary letter. If you would like a copy of the full commentary letter, please feel free to contact us at Ironwood Investment Management, LLC, (email: info@ironwoodfunds.com). 

Ironwood Investment Management, LLC‘s High I-Q Investment Approach: Small Cap Investing Excellence

Its disciplined investment philosophy is at the core of Ironwood’s Small Cap Core Strategy, emphasizing High I-Q (High “Ironwood-Quality”) portfolio companies. This approach focuses on identifying high-quality small cap companies with strong competitive positions, robust balance sheets, and sustainable business models. To learn more about our investment philosophy, you can read our [blog post on High I-Q investing]. 

Key Drivers of the Ironwood Investment Management, LLC Small Cap Core Strategy in 2024

High-Quality Stock Selection: Ironwood’s emphasis on companies with strong fundamentals and competitive advantages guides the portfolio. Disciplined Portfolio Management: Ironwood’s team strategically managed volatility by trimming exposure to underperforming stocks and capitalizing on opportunities in attractively valued companies.

How Our SCC Strategy Navigates Small Cap Market Volatility

Market fluctuations highlighted the resilience of individual portfolio holdings. While some stocks performed well earlier in the year, others faced challenges in the final quarter before rebounding.

Positioning Our Small Cap Core Strategy for Success in 2025

As we look to 2025, Ironwood remains optimistic about the opportunities in small cap stocks. Several factors support this outlook:

  • Attractive Valuations: The forward price-to-earnings (P/E) ratio of the Russell 2000 is near its historical average of 18x, signaling room for potential price improvements
  • Earnings Growth: Corporate earnings for the Russell 2000 are projected to rise in 2025.
  • Continued M&A Activity: A favorable environment for mergers and acquisitions is expected to persist, presenting more upside for small cap companies.

Ironwood’s disciplined approach to identifying investments ensures the strategy is positioned to navigate market dynamics.

Conclusion: Ironwood Investment Management, LLC’s Commitment to Small Cap Investing in 2025

The Ironwood Small Cap Core Strategy remains focused on a disciplined, quality-driven investment approach. As we look ahead to 2025, we are confident in our ability to navigate market challenges and uncover potential growth opportunities in the small cap space, as we have done since 1997. Our commitment to providing clients with performance and service remains unwavering. We thank our clients for their trust and partnership and look forward to another successful year together.

Ironwood Investment Management, LLC: Your Partner for Small Cap Investing

At Ironwood Investment Management, LLC, we are committed to empowering our clients with a disciplined approach to small cap investing. We believe the small cap market offers unique potential growth opportunities, and our team of experienced professionals has the expertise to navigate this dynamic landscape.

Why Choose Ironwood Investment Management, LLC for Small Cap Investing?

  • Deep Expertise: We specialize in managing small cap strategies, giving us a deep understanding of the market.
  • Disciplined Approach: Our rigorous investment process is designed to identify companies with sustainable competitive advantages.
  • Experienced Team: Our team possesses a wealth of knowledge and experience in the small cap market.
  • Exceptional Service: We offer personalized attention and regular updates on your investments.

Partner with Ironwood Investment Management, LLC for Small Cap Investment Success

If you are seeking a partner who can help you navigate small cap investing, we encourage you to contact us today. We would be happy to discuss your investment goals and provide you with more information about our services.

If you’d like to receive a copy of the full Q4 2024 commentary letter, please contact Ironwood Investment Management, LLC at info@ironwoodfunds.com or call us at (617) 757-7600.

Ready to explore how Ironwood can help you achieve your investment goals? Contact us today for a complimentary consultation.

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Important Disclosures & Disclaimers

Past Performance is Not Indicative of Future Results
The performance data provided in this blog reflects past performance, which may not be representative of future results. Investing in small cap stocks and other securities involves substantial risk, including the potential loss of principal. There is no guarantee that any investment strategy will be successful.

Forward-Looking Statements
This blog contains forward-looking statements, including expectations or forecasts about the performance of the market and specific securities. These statements are based on Ironwood Investment Management, LLC’s current beliefs and expectations but are subject to change without notice. Actual results may differ materially from those expressed or implied due to various risks and uncertainties, including market conditions, economic factors, and changes in government policy.

No Offer or Solicitation
This blog is for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities or investments. It is not intended to provide investment advice or to serve as a recommendation regarding any investment strategy. No client-adviser relationship is formed by reading this blog.

Conflicts of Interest
Ironwood Investment Management, LLC may hold positions in or recommend securities discussed in this blog. Clients should carefully review any investment strategy before committing to ensure it aligns with their investment objectives and risk tolerance.

Regulatory Disclosure
Ironwood Investment Management, LLC, is a registered investment adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.

Copyright © 2024 Ironwood Investment Management, LLC | All Rights Reserved.

John Grady

Research & Operations Associate

As Research & Operations Associate, John assists the equity research effort in support of the portfolio managers and works closely with the operations department. Prior to joining the Ironwood team in 2023, John earned his BA in Psychology, from the University of Denver. While studying, John developed several business plans for small businesses in the Denver area for a capstone project for his business minor. Prior to joining Ironwood, John was developing his research skills through an apprenticeship by regularly meeting with management teams, attending investor conferences, and developing investment theses.

Cameron Marshall

Trading & Research Associate

As a Trading & Research Associate, Cameron is responsible for investment portfolio trading and operations as well as conducting equity research in support of the portfolio managers. Prior to joining the Ironwood team in 2022, Cameron earned his BA in Economics, with a minor in Mandarin, from the University of New Hampshire. While studying, Cam held several internships working with investment teams across asset classes in both private and public markets. An active member of his community, Cam has contributed his time and energy to charities including Best Buddies International, Be Positive for CHaD Kids, and Positive Tracks.

Alyssa Wade

Director of Client Relationships

Alyssa Wade is the Director of Client Relationships and assists in the Marketing Department at Ironwood Investment Management, LLC®. Prior to joining Ironwood, Alyssa worked at Boston Technologies and Regan Communications Group. She holds a Bachelor of Arts in Communication with a minor in Education from the University of Massachusetts, Amherst.

Regina Wiedenski

Co-Portfolio Manager
Value Investment Partners (VIP) Strategies

Regina Wiedenski is Co-Portfolio Manager for the VIP strategies at Ironwood Investment Management, LLC®. Ms. Wiedenski has an MS in Management with a concentration in finance from the Sloan School at M.I.T. and a BS from M.I.T. Prior to joining Ironwood to manage VIP portfolios, she was a Portfolio Manager at J.L. Kaplan Associates. Previously she was an equity analyst at Advest, Inc. and had spent nine years as an analyst at Adams, Harkness & Hill covering healthcare, specialty chemical, instrumentation and publishing companies. She began her career as a financial analyst at Morgan Stanley.

Paul Weisman

Co-Portfolio Manager
Value Investment Partners (VIP) Strategies

Paul Weisman is Co-Portfolio Manager for the Value Investment Partners (VIP) strategies at Ironwood Investment Management, LLC®. Mr. Weisman has an MA in Industrial Organization (Applied Microeconomics) from Boston University and a BA from Haverford College. Prior to joining Ironwood as the head of the V.I.P. team in 2009, Mr. Weisman was Chief Investment Officer at J.L. Kaplan Associates which he joined in 1986. From 1983 to 1986 he was an investment analyst at Delphi Management.

Ravi Jain, Ph.D., CFA

Partner

Ravi Jain, Ph.D., CFA is a Partner at Ironwood Investment Management, LLC®. Dr. Jain has a Ph.D. in Finance from the University of Missouri Columbia (doctoral thesis on corporate spinoffs), a Master of Finance and Bachelor of Commerce from the University of Delhi. He is also a Chartered Financial Analyst® (CFA). Dr. Jain is an Associate Professor of Finance at the University of Massachusetts Lowell where his research focuses on capital markets and corporate finance.

Warren Isabelle

Portfolio Manager

Warren Isabelle, CFA is a Portfolio Manager at Ironwood Investment Management, LLC®. Prior to forming Ironwood Investment Management, LLC® in 1997, Warren was the Head of Domestic Equities at Pioneer Management Company and the Portfolio Manager of more than $3 billion in small cap assets including the Pioneer Capital Growth Fund (later renamed Pioneer Mid-Cap Value Fund), Pioneer Small Company Fund and several institutional portfolios. Warren has received national attention for his research efforts and results.  He has also appeared in feature articles in Barron’s, Business Week, Forbes, Fortune, Money and The Wall Street Journal and has appeared on “Wall Street Week with Louis Rukeyser.” Prior to joining Pioneer, Warren was an Analyst at The Hartford Insurance Company.  He earned a BS in Chemistry from Lowell Technological Institute, an MS in Polymer Science and Engineering from the University of Massachusetts, and an MBA in Finance from the Wharton School of the University of Pennsylvania.

Paul Anderson

Executive Managing Partner

Paul Anderson, CFA is Executive Managing Partner of and leads investor relations, business development and management activities for Ironwood and is a member of the management committee.  Paul joined Ironwood in December 2020 after 12 years at Natixis Investment Managers where he developed and led the U.S. institutional distribution group at Natixis Distributors L.P. Over the course of his 30 years in the industry, Paul has held roles in investment research, sales and management.  Paul holds a Bachelor of Arts in Economics from the University of New Hampshire, and an MBA from Vanderbilt University.  He is a member of the Committee on Investor Responsibility at UNH advising the UNH Foundation on sustainable investment practices.

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Shantelle Reidy

Executive Managing Partner
Chief Financial Officer
Chief Compliance Officer

Shantelle Reidy is Executive Managing Partner and the Chief Financial Officer and Chief Compliance Officer for Ironwood Investment Management, LLC®. Shantelle is a member of the management committee and has served Ironwood in various capacities since joining the firm in 1998, including as Executive Director of Trading and Operations from 2001 to 2014. Prior to joining Ironwood, Shantelle was an Investor Relations Analyst at Talbots, Inc. where she conducted research for the company and managed the firm’s communication with investment analysts. Shantelle holds a Bachelor of Arts degree in Economics and Political Science from Boston University and a Master of Business Administration in Marketing and Finance from the Boston University School of Management.

Donald Collins, CFA

Executive Managing Partner
Portfolio Manager

Donald Collins, CFA is an Executive Managing Partner and Portfolio Manager at Ironwood Investment Management, LLC® and is a member of the management committee. Prior to joining Ironwood in 1998, Don was a portfolio manager with Boston Advisors where he managed portfolios for institutions and high net worth clients.  During his tenure at Boston Advisors, Don participated in the management of the Advest Advantage family of mutual funds and managed the Advantage Special Fund.  Don began his career as a Manager for Burgess & Leith.  He earned his BA in Geology from Boston University and studied at the Boston University School of Business.  In addition, Don is the Director and Investment Committee Chairman for the Abelard Foundation, Chairman and Commissioner of Trust Funds for the Town of Lincoln, MA and Director and Chief Financial Officer at Igan Biosciences.

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