10 Small Cap Value Earnings Surprise Stocks

by: Scott's Investments

Below is a list of 10 small cap value earnings surprise stocks for the next 30 days. Last month's portfolio can be seen here. Last month the screen produced good results but underperformed some bechmarks, returning 4.49% versus 6.28% for VBR, a Vanguard small cap value ETF. Returns exclude dividends, slippage, and commission. However, as of 8/15/10, the Russell 2000 was trading just below the 200 day moving average so if you used the long term market trend to determine whether to use the screen, you would not have considered it last month. This month the Russell 2000 is just above its 200 day moving average.

My screen looks for a low PEG, recent earnings surprises, a minimum volume requirement, and small market capitalization. I exclude OTC stocks and I further narrow the list based on additional fundamental factors to 10 stocks or less. The list, as always, is not a specific portfolio but a recommendation for further research. Since this is a purely mechanical screen, I play no discretion in the results (other than establishing the original screen criteria). A couple of months ago I added a 200 day simple moving average requirement - stocks must be trading above their 200 day moving average in order to make the list. I use stockscreen123 as the screener.

The stocks on this list can be especially volatile given their low market capitalization, so please do proper due diligence. I find the list useful for gathering potential investment or trade ideas rather than a blanket "buy" list. Another option is to abandon this type of screen entirely when the underlying index is trading below its long-term moving average (such as the 200 day), a strategy which I prefer especially with the more volatile stocks produced by this screen.

Ticker Name Trend Analysis Rank MktCap Industry
FINL The Finish Line, Inc. Here 99.34 821.48 Retail (Apparel)
MDF Metropolitan Health Networks, Here 99.04 150.83 Healthcare Facilities
NSIT Insight Enterprises, Inc. Here 98.36 703.7 Computer Hardware
MEAS Measurement Specialties, Inc. Here 97.64 244.05 Scientific & Technical Instr.
GIII G-III Apparel Group, Ltd. Here 97.61 603.71 Apparel/Accessories
BGG Briggs & Stratton Corporation Here 96.25 966.93 Misc. Capital Goods
NANO Nanometrics Incorporated Here 95.96 286.22 Semiconductors
STKL SunOpta, Inc. (NYSE:USA) Here 95.79 384.85 Food Processing
ABG Asbury Automotive Group, Inc. Here 94.86 419.13 Retail (Specialty)
IRBT iRobot Corporation Here 94.34 460.29 Appliance & Tool
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Disclosure: No positions