Virtus KAR Mid-Cap Growth Fund (VRMGX) Fund Overview

Virtus KAR Mid-Cap Growth Fund (VRMGX) Financial Services Profile

Virtus KAR Mid-Cap Growth Fund (VRMGX) is an asset management fund specializing in identifying and investing in undervalued, medium-capitalization growth companies, primarily within the U.S. market, while also considering select foreign securities, and exhibiting a higher beta compared to the broader market.

What Is the Investment Thesis for VRMGX?

Virtus KAR Mid-Cap Growth Fund presents a notable research candidate for investors seeking exposure to high-growth, mid-cap companies. With a beta of 1.32, the fund demonstrates higher volatility than the market, potentially offering higher returns. The fund's gross margin of 39.5% indicates efficient operations. The significant dividend yield of 46.74% could attract income-seeking investors. However, the high P/E ratio of 159.05 suggests the fund's holdings are trading at a premium, and the low profit margin of 1.5% raises concerns about profitability. Upcoming AI analysis may provide further insights.

Based on FMP financials and quantitative analysis

VRMGX Key Highlights

Market Cap of $0.52B indicates a mid-sized fund with room for growth.

• P/E Ratio of 159.05 suggests the fund's holdings are trading at a premium relative to earnings.
• Profit Margin of 1.5% is relatively low, indicating potential challenges in profitability.
• Gross Margin of 39.5% demonstrates reasonable efficiency in managing investment costs.
• Dividend Yield of 46.74% is exceptionally high, potentially unsustainable, and requires further investigation.

Who Are VRMGX's Competitors?

VRMGX is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are VRMGX's Key Strengths?

Focus on undervalued mid-cap growth companies.

• Potential for high returns due to higher beta.
• Flexibility to invest in foreign securities.
• High dividend yield.

What Are VRMGX's Weaknesses?

High P/E ratio suggests overvaluation.

• Low profit margin raises profitability concerns.
• Higher beta indicates increased volatility.
• Dependence on the subadviser's stock selection skills.

What Are the Key Risks for VRMGX?

Financial-distress signal — its Altman Z-Score of 1.02 sits in the distress zone (elevated bankruptcy risk).

• Rich valuation — a P/E of 159.05 runs well above the Financial Services sector’s ~17.20x, leaving little room for a miss.
• Market volatility impacting the fund's performance.
• Underperformance of the subadviser's stock selections.
• Changes in investor sentiment towards mid-cap equities.
• High P/E ratio indicating potential overvaluation.

What Threats Does VRMGX Face?

• Increased competition from passive investment strategies.
• Economic downturn impacting mid-cap companies.
• Changes in interest rates and market volatility.
• Regulatory changes affecting the asset management industry.

What Are VRMGX's Competitive Advantages?

• Established track record in identifying and investing in undervalued growth companies.
• Experienced investment team with expertise in mid-cap equities.
• Disciplined investment process focused on fundamental research and stock selection.

What Does VRMGX Do?

Virtus KAR Mid-Cap Growth Fund (VRMGX) is an actively managed fund focused on investing in medium market capitalization companies with strong growth potential. The fund operates under the principle of identifying companies that are undervalued relative to their anticipated future growth. VRMGX primarily invests in equity securities of U.S. companies, allocating at least 80% of its assets to this segment. However, the fund maintains the flexibility to invest in foreign securities and depositary receipts, providing a degree of diversification beyond the domestic market. The fund's investment strategy is centered around identifying companies with sustainable competitive advantages, strong management teams, and the potential for above-average earnings growth. The fund's subadviser conducts in-depth fundamental research to pinpoint these opportunities, focusing on factors such as industry dynamics, company-specific catalysts, and valuation metrics. VRMGX aims to deliver long-term capital appreciation by capitalizing on the growth potential of its chosen investments. The fund's investment approach reflects a commitment to disciplined stock selection and a focus on companies with the capacity to generate consistent, above-average returns.

What Products and Services Does VRMGX Offer?

• Invests in equity securities of medium market capitalization companies.
• Focuses on companies believed to be undervalued relative to their future growth potential.
• Primarily invests in U.S. companies.
• May invest in foreign securities and depositary receipts.
• Aims to achieve long-term capital appreciation.
• Employs a select group of medium market capitalization growth companies.

How Does VRMGX Make Money?

• Generates revenue through management fees charged on assets under management (AUM).
• Aims to increase AUM by attracting new investors and retaining existing clients.
• Seeks to outperform its benchmark index to deliver value to investors.

What Industry Does VRMGX Operate In?

Virtus KAR Mid-Cap Growth Fund operates within the asset management industry, which is characterized by intense competition and evolving market dynamics. The industry is influenced by factors such as interest rates, economic growth, and investor sentiment. The rise of passive investing and exchange-traded funds (ETFs) has put pressure on active managers like VRMGX to demonstrate their value proposition. Competitors like BUFIX, DHMAX, FANIX, FIEUX, and RSEFX offer similar investment strategies, creating a competitive landscape where differentiation and performance are critical.

Who Are VRMGX's Key Customers?

• Individual investors seeking growth-oriented investment options.
• Financial advisors looking for investment solutions for their clients.
• Institutional investors seeking exposure to mid-cap equities.

Return on equity for Virtus KAR Mid-Cap Growth Fund stands at 1.6%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 0.6%, showing how much profit it generates from its asset base. VRMGX trades at a trailing price-to-earnings ratio of 159.05, above the Financial Services sector average of ~17.20x. Its free cash flow yield is 6.0%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.54 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 0.6%, the inverse of the P/E and a quick read on earnings relative to price.

Virtus KAR Mid-Cap Growth Fund's Piotroski F-Score is 6/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 1.02 places it in the distress zone, a signal of elevated financial risk.

VRMGX Financials

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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