Are company visits an efficient means of research? Coverage of stocks by analysts and fund managers is limited if they spend time visiting companies. Even a large group with a great number of analysts can research in detail a maximum of 3,000 stocks in this way.

Sellside analysts tend to cover large and mid-cap stocks, according to IBES, a consensus earnings provider. However, technology allows them to analyse across the spectrum, using the same valuation methodology for small caps as for large. Small caps exhibit greater valuation anomalies, largely because of the lack of coverage, and these anomalies may be translated into outperformance for clients.