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Small and Micro Cap Knowledge Hub

Unlocking Hidden Potential

The Advantage of Small and Micro Cap Investments

Less-explored markets

Less efficient markets with little sellside coverage create ample opportunity for active managers.

Fewer players fishing in the same pond

Liquidity limits the number of investors, particularly those with large AUM who lack the flexibility to make material investments.

Breaking misconceptions to find opportunities

We look beyond common misconceptions about the quality of companies down the market cap spectrum to find unique ideas.

Source: FactSet, as of 30 June, 2025

Key Tenets of Our Approach

We seek to uncover resilient businesses with underappreciated long-term opportunities. Being patient with an owner’s mindset is a durable advantage in a market consistently focused on the next quarter. Utilizing our intrinsic value investment philosophy, we lean into a few key tenets within the small and micro universe.

Capacity to Suffer

Look for resilient companies with a durable competitive advantage. These businesses are built to survive and be opportunistic during challenging times. They are in control of their outcomes and not beholden to the good graces of a creditor or the economy.

Long-term Opportunities

Seek companies making investments not just for tomorrow or the next quarter but are genuinely laying the groundwork for the company to defend its competitive position and thrive in the decades to come.

Ownership Mindset

Look to partner with management teams that are strongly aligned with us as passive shareholders and think like owners themselves. These businesses tend to demonstrate a superior ability to execute, have prudent capital allocation priorities and are astute business operators.

Wise Use of Leverage

When we find a company using leverage, it should be supported by hard assets, steady cash streams or a unique characteristic that provides stability.

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Dare to be Different

9 September 2025

In a world of over-diversification, conviction matters. Our Micro Cap strategy demonstrates how focusing on and conducting in-depth research on select holdings can unlock differentiated returns. (4 min read)

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Are You Overallocated to Private Equity?

29 April 2025

Institutional portfolios heavily allocated to private equity face rising structural challenges. Discover why publicly traded micro-cap stocks have the potential to offer a transparent, more liquid alternative. (5 min read)

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Under the Micro(cap) Scope

17 June 2025

Unlock the overlooked potential of microcap investing. In our latest insight, Under the Micro(cap) Scope, we explore why this expansive and under-researched market segment offers unique opportunities for long-term, active investors. (8 min read)

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Insider ownership provides alignment with our philosophical approach to investing as a meaningful percentage of small and micro cap companies have higher insider ownership.

Insider Ownership (%)

Source: FactSet, as of 30 June, 2025

Our Experts at the Helm

We work side-by-side, conducting in-depth research and diligence on small and microcap companies. Built on trust and mutual respect, our collegial approach allows us to harness the unique strengths each member brings to the table. With over 60 years of combined investment experience, we are committed to uncovering overlooked opportunities and delivering exceptional insights to our clients.

Aaron Monroe headshot

Aaron Monroe, CFA

20 years industry experience

John Loesch headshot

John Loesch, CFA

24 years industry experience

Tyler Ventura headshot

Tyler Ventura, CFA

18 years industry experience

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Video

Small Companies, Big Conviction: Inside Small Cap Investing

27 January 2026

After several years of large-cap dominance, shifting market conditions may now offer one of the most compelling entry points for small caps in recent history. Portfolio manager Aaron Monroe explores this dynamic, how domestically focused small caps could hold up well in a post-tariff tantrum world and where our team is finding opportunities today in this recent webinar. (37 min video)

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A Tale of Two Companies

21 November 2025

In cyclical industries, value isnt created by predicting the cycle. It’s earned by sticking to your playbook when conditions shift. Explore how capital discipline — or the lack of it — shaped investor outcomes in the contrasting paths of two energy companies. (4 min read)

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Eyes Wide Shut: Risks of Complacency

16 September 2025

Complacency in markets breeds risk. Discover why resilience and the “capacity to suffer” are critical to enduring volatility — and seizing hidden opportunities. (3 min read)

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Never Let a Good Panic Go to Waste

20 May 2025

Don’t waste a good panic. Discover why market downturns can be the perfect time to reposition your portfolio and thrive long-term. (4 min read)

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A Dollar in the Ground

2 April 2025

Discover how investing in resilient, asset-rich companies like Red Rock Resorts and Ryman Hospitality can offer long-term value amid market uncertainty. (5 min read)

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View all our insights

Get acquainted with our small and micro cap strategies

Micro Cap

A portfolio of 25-40 companies with a market capitalization below $1 billion at the time of purchase.

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Small Cap

A diversified portfolio of 50-80 companies with a market capitalization below $3 billion (or, if greater, the maximum market cap of companies generally within the cap range of the Russell 2000 Index) at the time of purchase.

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Bespoke Solutions

Leverage our deep expertise to craft tailored investment strategies that align with your unique objectives.

Let's start the conversation

DIAMOND HILL® CAPITAL MANAGEMENT, INC. | DIAMOND-HILL.COM | 855.255.8955 | 325 JOHN H. MCCONNELL BLVD | SUITE 200 | COLUMBUS, OHIO 43215