New book shares the lessons of Burkenroad Reports
As director of the Freeman School’s Burkenroad Reports program, Peter Ricchiuti has spent more than 20 years highlighting the small, profitable companies that often fly under the radar of Wall Street. Now, Ricchiuti has collected some of the lessons he’s learned over the years in a new book.
Stocks Under Rocks: How to Uncover Overlooked, Profitable Market Opportunities (FT Press), co-written with New Orleans Advocate features editor Annette Sisco, is a funny, informative guide to investing based on Riccchiuti’s experiences running the acclaimed student equities research program.
“It’s all the stories I tell in class and all the stories we get from visiting with the companies, but integrated into the funny stories is what we found that makes those companies a smart investment,” says Ricchiuti, a professor of practice in finance. “Every company represents a few anecdotes and a few funny stories but also one investment lesson learned.”
For example, don’t limit your investments to hip, sexy stocks. Ricchiuti says hopelessly unfashionable companies like pawn shops and convenience stores may not win you many points at cocktail parties, but they often generate higher returns than the latest media darling tech company.
“It’s the least attractive stuff,” Ricchiuti laughs, “but when you look at the financials, they all have great stories.”
Investors willing to look beyond the surface would learn that Cash America, for example, the pawn shop company, actually derives much of its revenue from a lucrative online loan business, while Susser Holdings, operator of Stripes convenience stores, attracts customers with a chain of high-quality in-store Mexican restaurants.
Ricchiuti says the biggest lesson of all when it comes to regional small-cap stocks is that individual investors really can gain an advantage over Wall Street.
“The conventional wisdom, particularly in academia, is that every stock is already efficiently priced, but when you get down low enough and small enough, there’s often times no other coverage,” Ricchiuti says. “If you’re willing to do the research, you really can know more than anyone else, and for an investor, that’s a great place to be.”
Peter Ricchiuti will be reading from and signing Stocks Under Rocks at the uptown location of Maple Street Book Shop on Thursday, Feb. 6, at 6 p.m.