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A couple of weeks ago, MagicDiligence looked at MFI stocks in the Forbes' Best 200 Small Companies for 2009 list. In producing that article, I thought it would be interesting to take these 200 firms as a "universe", calculate MFI earnings yield and return on capital statistics for each, and then rank them to get a Magic Formula-style list of which ones are the best combination of cheap and high quality.

The recent break gave me a chance to do just that. Before we get to the list, though, a few things should be mentioned. The first is that some current official MFI stocks are not that highly rated here, though most are. The main reason for this is how different data providers treat operating expenses. For example, InterDigital (IDCC - a current MFI stock) has $37 million in one-time restructuring fees in the past 12 months that are technically operating expenses but should be treated as non-operating for MFI purposes. The data feed used for this project included them, leading to its relatively low ranking. Also, Joel Greenblatt's exact recipe for calculating MFI statistics is unknown. The numbers below use MagicDiligence's approximations for earnings yield and MFI return on capital.

There were 3 stocks in the 200 that cannot be judged on a Magic Formula basis, as the strategy explicitly ignores financial and utility companies. These include Portfolio Recovery (NASDAQ:PRAA), Asset Acceptance (AACC), and Cass Infomation Systems (NASDAQ:CASS). MSCI (MXB) has negative invested capital using my calculations, so it was thrown out as well. Finally, Hi-Shear Technology (HSR) was missing data and thus discarded.

So, all that said, here are the rankings, with statistics calculated from prices at Friday's market close:

RankCompanyTickerMFI ScoreEYROICEY RankROIC Rank
1AmsurgAMSG1530.8%155.0%213
2j2 Global CommunicationsJCOM2615.4%386.3%242
3Pre-Paid Legal ServicesPPD2922.2%121.9%920
4Almost FamilyAFAM3116.0%172.1%229
5U.S. Physical TherapyUSPH4416.5%99.6%1826
6LHC GroupLHCG4614.7%124.0%2818
7Bolt TechnologyBOLT4923.2%61.0%643
8Allegiant TravelALGT5020.5%68.4%1040
9ExponentEXPO5118.4%68.8%1338
10Sterling ConstructionSTRL5825.3%49.4%454
11PetMed ExpressPETS6212.0%122.7%4319
12HawkinsHWKN6319.9%51.9%1152
13Forrester ResearchFORR6811.1%130.1%5117
14National Presto IndustriesNPK7117.3%49.4%1655
15Matrix ServiceMTRX7323.2%42.2%766
16K-Tron InternationalKTII7414.4%60.1%3044
17Deckers OutdoorDECK7714.6%58.2%2948
18American Science & EngineeringASEI7911.3%89.5%4831
19Powell IndustriesPOWL8218.0%41.8%1567
20Nathan's FamousNATH8811.6%64.2%4741
21TekelecTKLC8813.1%54.4%3850
22Liquidity ServicesLQDT909.0%236.7%864
23MiddlebyMIDD9210.0%115.8%6923
24AZZAZZ9216.1%39.8%2171
25Comtech TelecommunicationsCMTL9313.2%49.3%3756
26ChattemCHTT979.0%133.4%8116
27AaonAAON9713.9%42.8%3364
28Jos. A. Bank ClothiersJOSB9815.7%37.3%2375
29Air TAIRT10629.4%29.1%3103
30RimageRIMG10814.8%34.6%2781
31WD-40WDFC1129.0%90.5%8230
32Sport Supply GroupRBI11412.7%39.0%4173
33NCINCIT1158.9%91.1%8728
34CBIZCBZ11611.0%44.7%5363
35Navigant ConsultingNCIT1178.9%91.1%8829
36Rocky Mountain Chocolate FactoryRMCF11710.6%48.2%6057
37J&J Snack FoodsJJSF11711.3%40.9%4968
38Jack Henry & AssociatesJKHY1189.0%82.2%8533
39QuidelQDEL1189.8%59.8%7345
40NutriSystemNTRI1227.6%166.2%11111
41Dolby LaboratoriesDLB1248.4%104.0%10024
42Hittite MicrowaveHITT1297.8%120.5%10821
43Inter ParfumsIPAR12915.4%28.7%25104
44Ensign GroupENSG13317.0%24.3%17116
45SyntelSYNT1358.2%83.0%10332
46Pros HoldingsPRO1376.6%183.0%1298
47Raven IndustriesRAVN1399.4%45.4%7762
48FactSet Research SystemsFDS1406.4%199.2%1346
49Computer Task GroupCTGX14011.9%31.1%4496
50Atlantic Tele-NetworkATNI14110.7%34.0%5784
51American ReprographicsARP14111.0%32.9%5487
52Peet's Coffee & TeaPEET14111.1%32.7%5289
53Transcend ServicesTRCR1436.3%225.5%1385
54LandauerLDR1437.3%98.9%11627
55CPI InternationalCPII14311.7%30.8%4697
56World Wrestling EntertainmentWWE1498.5%52.5%9851
57Tessco TechnologiesTESS14916.2%20.5%20129
58Young InnovationsYDNT1509.7%36.7%7476
59Friedman IndustriesFRD15031.7%16.1%1149
60Ampco-PittsburghAP15124.6%16.9%5146
61Digital RiverDRIV1529.0%40.0%8369
62Rick's Cabaret InternationalRICK15223.2%17.4%8144
63American Public EducationAPEI1546.3%134.1%13915
64Books-A-MillionBAMM15418.7%18.0%12142
65Quest SoftwareQSFT1567.2%68.9%11937
66VolcomVLCM15810.8%29.2%56102
67JDA Software GroupJDAS1597.3%62.0%11742
68AnsysANSS1614.8%244.8%1583
69Portec Rail ProductsPRPX16111.2%25.8%50111
70Communications SystemsJCS16115.1%19.3%26135
71Strayer EducationSTRA1635.6%158.2%15112
72CoStar GroupCSGP1666.6%70.5%13036
73Tyler TechnologiesTYL1685.8%118.5%14622
74Orion Marine GroupORN1689.6%31.9%7593
75Capella EducationCPLA1695.1%146.5%15514
76BalchemBCPC1697.1%59.3%12346
77SynapticsSYNA1697.8%47.7%10960
78L.B. FosterFSTR16914.0%19.1%31138
79Argon STSTST-OLD1709.3%32.0%7892
80Dorman ProductsDORM17013.8%19.3%34136
81ICU MedicalICUI17210.4%27.4%63109
82LSB IndustriesLXU17212.9%19.5%40132
83InformaticaINFA1743.8%447.6%1731
84Quality SystemsQSII1744.5%167.3%16410
85TechneTECH1746.4%68.6%13539
86NICEGOV1754.1%184.4%1687
87HeicoHEI1758.6%35.2%9679
88Steven MaddenSHOO1758.9%33.0%8986
89Spectrum ControlSPEC17514.0%17.8%32143
90DionexDNEX1766.8%55.7%12749
91Lumber LiquidatorsLL1777.0%50.6%12453
92Integra LifeSciencesIART1778.5%35.7%9978
93Lufkin IndustriesLUFK17810.3%25.3%65113
94Meridian BioscienceVIVO1795.9%72.3%14435
95Boston BeerSAM1798.7%33.3%9485
96Computer Programs & SystemsCPSI1815.1%101.2%15625
97DXP EnterprisesDXPE18110.7%22.5%58123
98GulfMark OffshoreGLF18216.4%12.7%19163
99SomaneticsSMTS1859.1%28.7%80105
100Badger MeterBMI1868.2%34.5%10482
101American Physicians Service GroupAMPH-OLD18718.4%10.3%14173
102QLogicQLGC1886.2%59.0%14147
103Calavo GrowersCVGW1889.5%25.7%76112
104Multi-ColorLABL18810.6%21.3%61127
105Darling InternationalDAR1898.9%30.0%9099
106Shenandoah TelecommunicationsSHEN19010.7%20.3%59131
107Emergent BiosolutionsEBS19110.0%23.1%70121
108AdtranADTN1928.3%32.1%10191
109Oil-Dri Corp of AmericaODC19313.3%14.4%36157
110Obagi Medical ProductsOMPI1946.4%48.2%13658
111Hibbett Sporting GoodsHIBB1958.7%29.6%95100
112Houston Wire & CableHWCC19710.2%20.5%67130
113ESCO TechnologiesESE1987.3%35.2%11880
114HaemoneticsHAE2007.6%32.9%11288
115Dover Downs Gaming & EntertainmentDDE20212.1%13.6%42160
116Dynamic MaterialsBOOM2048.6%27.9%97107
117National HealthcareNHC20513.1%11.6%39166
118Northwest PipeNWPX20513.7%10.7%35170
119HMS HoldingsHMSY2064.0%76.1%17234
120CornellCRN20711.8%13.0%45162
121ICF InternationalICFI2106.5%36.2%13377
122ChaseCCF21010.0%18.6%71139
123Wright ExpressWXS21010.5%16.6%62148
124Cantel MedicalCMN2118.2%28.4%105106
125Natural Gas Services GroupNGS21110.9%15.0%55156
126TIBCO SoftwareTIBX2146.3%38.3%14074
127Healthcare Services GroupHCSG2156.0%39.8%14372
128Bio-Reference LaboratoriesBRLI2157.2%31.2%12095
129Insituform TechnologiesINSU2158.9%22.5%91124
130DG FastChannelDGIT2175.7%40.0%14770
131TenetTISI2188.9%21.6%92126
132IEC ElectronicsIEC2199.9%16.8%72147
133KaydonKDN2248.1%24.1%106118
134MedifastMED2284.1%47.9%16959
135Carbo CeramicsCRR2297.4%24.5%114115
136Air MethodsAIRM2299.2%16.1%79150
137Marten TransportMRTN23310.4%10.9%64169
138AnarenANEN2399.0%15.3%84155
139Monro Muffler BrakeMNRO2417.2%23.3%121120
140Universal ElectronicsUEIC2437.8%19.5%110133
141Concur TechnologiesCNQR2442.3%47.3%18361
142MTS SystemsMTSC2447.0%23.9%125119
143Hornbeck Offshore ServicesHOS24710.3%8.0%66181
144NeogenNEOG2494.8%32.4%15990
145Twin DiscTWIN25010.2%8.0%68182
146Lincoln Educational ServicesLINC2541.6%42.6%18965
147Energy RecoveryERII2584.8%30.4%16098
148Gen-ProbeGPRO2585.7%27.2%148110
149F5 NetworksFFIV2603.5%34.2%17783
150CogentCOGT2608.3%13.9%102158
151Buffalo Wild WingsBWLD2656.4%21.3%137128
152ExactechEXAC2668.1%13.7%107159
153NVENVEC2715.7%22.8%149122
154Gulf Island FabricationGIFI2728.8%9.0%93179
155AeroVironmentAVAV2754.2%27.8%167108
156Gorman-RuppGRC2767.2%15.7%122154
157Red HatRHT2792.0%31.4%18594
158Green Mountain Coffee RoastersGMCR2793.4%29.5%178101
159LindsayLNN2795.9%19.4%145134
160Franklin ElectricFELE2796.9%15.8%126153
161United States Lime & MineralsUSLM2797.4%12.4%115164
162Knight TransportationKNX2826.6%16.1%131151
163Anika TherapeuticsANIK2847.6%10.7%113171
164GracoGGG2893.6%24.9%175114
165Advisory BoardABCO2895.5%19.2%152137
166InterDigitalIDCC2904.5%21.9%165125
167Dril-QuipDRQ2975.0%18.4%157140
168Heartland ExpressHTLD2985.5%17.1%153145
169RentrakRENT2992.6%24.3%182117
170AngioDynamicsANGO3024.8%18.3%161141
171Pike ElectricPIKE3056.8%9.6%128177
172California Pizza KitchenCPKI3126.6%8.2%132180
173Genesee & WyomingGWR3186.1%9.7%142176
174ViaSatVSAT3215.5%11.3%154167
175Forward AirFWRD3224.1%15.9%170152
176GeoResourcesGEOI3375.7%5.9%150187
177ZumiezZUMZ3414.3%9.8%166175
178Citi TrendsCTRN3423.7%11.3%174168
179II-VIIIVI3443.4%12.2%179165
180AstronicsATRO3454.8%7.0%162183
181PerficientPRFT3471.9%13.4%186161
182EasternEML3494.6%6.0%163186
183BJ's RestaurantsBJRI3554.1%6.2%171184
184Rackspace HostingRAX3562.1%10.7%184172
185Arena ResourcesARD3583.4%9.4%180178
186National InstrumentsNATI3621.7%10.3%188174
187Ladish CompanyLDSH3673.6%3.1%176191
188Berry PetroleumBRY3713.2%3.4%181190
189Royal GoldRGLD3751.6%6.2%190185
190SupertexSUPX3761.9%4.3%187189
191Bovie MedicalBVX3820.5%4.6%194188
192Rochester MedicalROCM3850.7%3.1%193192
193DiodesDIOD3851.0%2.1%192193
194RTI International MetalsRTI3851.4%0.8%191194
195StratasysSSYS3900.1%0.3%195195

Disclosure: Steve owns no position in any stocks discussed in this article.

Source: Forbes' 200 Best Small Companies Through the Magic Formula Screen