KZAP and other good people. Might be good for another couple of dollars today (KIDE)?|
Nov 03, 1999
Driehaus Capital: Finding Unique Growth Ideas
Associate Editor: Len Hollie 11/3/99
Richard Driehaus, founder, CEO and Chairman of Chicago-based Driehaus Capital Management Inc. says the general market remains technically weak and he believes market sentiment is moving towards becoming more stock specific.
“Fundamentally sound, high performing stocks will become more
of the focus, instead of certain sectors that have been anointed
the favorites,” says Driehaus, who has been picking stocks and
managing portfolios for nearly 35 years. Driehaus Capital manages $4 billion in international mutual funds as well as domestic private and institutional accounts.
“From those individual stocks, we think investors can find some very large market winners. We have already, but we think there are a lot more out there,” he says.
Driehaus favors mid-, and small-cap growth stocks, and defines small-cap as companies with $300 million to $1 billion in market capitalization, and mid-caps as companies with $1 billion to $5 billion in capitalization. But, he says they may increase those limits.
“We're aggressively trying to find individual ideas in our stock picking and we think that both mid-cap and small-cap companies are going to have good growth potential,” Driehaus adds.
Some of his favorites include:
4Kids Entertainment Inc. (NASDAQ:KIDE - news) , a Japanese import that is a multimedia phenomenon. The animated characters named Pokemon, or Pocket Monsters, are based on a Nintendo Co. Ltd. video game. New York City-based 4Kids Entertainment distributes the Pokemon television show and its subsidiary, Leisure Concepts Inc., is licensing agent for the Pokemon show and movie.
“The company has the licenses to Pokemon, and I don't know if Pokemon is a fad or a craze. I put it more in the category of phenomena, which I think is a little longer in duration,” says Driehaus.
The stock was trading near $82 per share Tuesday, near its 52-week high of $89.94 per share. Since early September, the stock has soared from a split-adjusted price of about $38 per share.
“In Japan, Pokemon's popularity has been going on for four years, and it has created about a $4 billion industry. It's just beginning to hit the states and the numbers can be very large. It's hard to predict the extent of the popularity, because at some point it's going to slow down. But the point is, when the momentum is still so strong, we'll try to participate in what we think is a real good near term move in the stock,” Driehaus adds.