stocks, rising after the May CPI report shows inflation rising at a slower pace here. My next guest says that mid caps are overlooked by Wall Street, making them fertile grounds for active stock pickers. Joining me now, we've got Amy Zhang, who is the Alger executive vice president and portfolio manager. Good to have you here with us this morning.

Where are you seeing opportunity in mid caps right now?

Good morning, Brent. Thank you for having me on. Yes, I mean, happy, you know, I think it's really a hidden gem. Um, you know, has the best of both worlds compared to small cap and large cap, you know, has the discovery value similar to small cap is during a not very well covered by the street and a very inefficient. Uh, but it's also has similar financial quality compared to large cap and similar liquidity. So it really makes it a very fertile ground for active management and I still think and the you I think investors typically are still under allocated in the mid cap space.

How are you evaluating small and mid caps amid what we're watching play out in the bond market, knowing that they're more dependent on the fluctuations in the cost of capital?

Well, uh some of them do. Uh you're absolutely right, but you know, at Alger we're stock pickers. So really we focus on bottom bottom up um analysis and really we favor companies has very strong um balance sheet and um very um strong casual generating capabilities so they can fund their own growth.

Okay, so as you're picking names, who are those names that rise to the top of the the list?

Well, one of our high conviction names um also um been a long-term shareholder we've invested in RBC Bearings since 2020. Um it's a you know, at at at Alger as stock pickers we invested in exceptional small make companies to have the potential to become exceptional large companies and RBC really exemplify other characteristics we look for in a um exceptional um, you know, company. Um the company, you know, it's a market leader in highly engineered precision bearings for commercial aerospace, defense and industrial markets. Um those are very, you know, mission critical bearings, are highly regulated, require very stringent performance requirements and those are really, you know, very uh critically important to manufacture and operations of, you know, aircraft, mechanical system, um and they reduce wear tear, energy loss, um and facility, you know, power transmission, control, pressure and flow. So it's a very special um uh, you know, the company also has very special company but they also have the best uh breadth and the depth of a company. Um and very diversified in their markets, um but also has, you know, they are um major vast majority of their products are solely source. So it's very hard to replace them. That give them a very strong uh competitive mode. So in today's world, people worry about, you know, inflation, uh and a recession and we always say we want to invest in like a motorboat, like, you know, RBC, they have their own idiosyncratic drivers, their pricing power. Um specifically, notably the biggest, you know, the fastest growing segment is commercial aerospace, which, you know, we think it has a very strong uh tailwind for multi-year cyclical recovery. Number one is because, you know, that industry saw a very steep um, you know, downturn in 2020 and 21 due to COVID travel restrictions. But also, um, you know, with the additional headwind including the grounding of Boeing 737 max, uh and industry wide supply chain constraints. But all those issues are resolved now. So we think you know, RBC is very well positioned to benefit from the multi-year, probably 10 plus year of cyclical recovery.

What what should investors be keeping tabs on with regard to tariff policy as it flows through to small and mid cap names that you're tracking?

That's excellent question. I think company we should focus on company can control their own destiny like RBC bearings because you want a company have differentiated products, that pricing power, so they can pass, you know, because the product is so mission critical, they can pass, you know, most of their tariff, uh, you know, that to if some of all of them, right, to their customers. So I think so we really that's why we really focus on company have very strong um competitive advantage, um and have pricing power.

Amy, good to see you. Thanks for joining us again.

Yeah, thank you for having me.