Small Cap Select Value

Objective

Long-term capital appreciation through investments in small capitalization companies that we believe are undervalued. Companies generally have market capitalizations of $100 million to $3 billion at time of investment.

Approach

We seek to identify high quality, undervalued companies with a catalyst to positively reset expectations within the next one to three years and, ultimately, lead to long-term appreciation. We believe that shorter investment horizons, fragmented analyst coverage, and increased passive investing have contributed to added opportunities for misplaced investor expectation and undervalued stocks.

Process

Applying a fundamental, bottom up stock selection process we leverage a history of internal research by a long-tenured team. For inclusion within the portfolio, we consider a variety of possible catalysts which are then applied to stocks which can be classified as one of four “value categories”: Undervalued Growth, Turnaround, Undervalued Asset, and Emerging Growth.

Performance

Source: Teton Advisors, Inc. Past performance does not guarantee future results. Quarterly and YTD returns are not annualized. Inception date of the strategy is July 1, 2008. Net-of-fees composite returns were calculated based upon the investment advisory fees for the client portfolios contained within the composite. Advisory fees are negotiable and standard fees is contained in the firm’s Form ADV Part 2A which is available at no cost at Keeley Teton Advisors, LLC. All performance results are net of commissions and transaction costs, and have been presented gross and net of investment advisory fees for illustrative purposes. Dividend income is recorded on ex-dividend date or as soon after the ex-dividend date as the information becomes available to Teton Advisors, Inc. Interest income is recorded on the accrual basis. Performance results for the index includes reinvested dividends but, unlike the strategy’s returns, do not reflect the payment of sales commissions or other expenses incurred in the purchase or sale of the securities included in the index. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal will fluctuate so that an investor’s portfolio, when liquidated, may be worth less than the original cost/balance. As with any investment, there is a potential risk of loss. Smaller and medium-sized company stocks are more volatile and less liquid than larger, more established company securities.

The Russell 2000 Value and Russell 2000 Index is an unmanaged index and cannot be invested in directly. The Russell 2000 Index is an unmanaged index of 2,000 small cap U.S. stocks that is generally considered to be representative of small capitalization issues in the U.S. stock market. The Russell 2000 Value Index measures the performance of the small cap value segment of the U.S. equity universe. Index performance is presented for informational purposes.

The growth chart presented above represents cumulative performance with a beginning value of 100 at the inception date (07/01/2008) and is based on compounded monthly performance data (gross and net) versus the index shown. Direct investments into an index are not possible.

Teton Advisors, Inc. is the registered investment adviser to this strategy.