The Russell 2000-the index of smaller companies-split with the Dow Jones last Tuesday, losing more than 1% while the Dow edged up on favorable news from the financial sector.
Remarks by Federal Reserve Chair Janet Yellen, who announced her concern about valuations amongst smaller internet and biotechnology firms, threw a pessimistic pall on those stocks, which are among the most popular stocks among small-cap investors.
Small-cap stocks are the most susceptible to swings in market sentiment right now, since it's expected that stretched valuations will lead to quicker interest rate hikes.
With stocks in this area being punished, we decided to see who had outperformed during the period, with the Russell 2000 reaching a two-year-low this past week.
To do that we screened for stocks under $5 that were also rallying above their 20-day, 50-day, and 200-day simple moving averages (SMAS). This means the stock has strong upward momentum.
Next, we screened for stocks that had interest from institutional investors like hedge fund and pension managers. This information is often closely watched since institutional investors often have access to the best information.
1. American Apparel, Inc. (NYSEMKT:APP): Engages in the manufacture, distribution, and retail of fashion basic apparel for women, men, children, and babies. Market cap at $147.43M, most recent closing price at $0.85.
Net institutional purchases in the current quarter at 10.8M shares, which represents about 11.42% of the company's float of 94.58M shares.
SMA 20: 40.76%
SMA 50: 63.77%
SMA 200: 25.98%
Major holder: 1832 Asset Management L.P. at a 5.39% stake.
2. pSivida Corp. (NASDAQ:PSDV): Develops drug delivery products that are administered by implantation, injection, or insertion. Market cap at $133.09M, most recent closing price at $4.55.
Net institutional purchases in the current quarter at 1.2M shares, which represents about 5.43% of the company's float of 22.11M shares.
SMA 20: 3.84%
SMA 50: 13%
SMA 200: 16.55%
Major holder: RA Capital Management, LLC at an 8.75% stake.
3. Progenics Pharmaceuticals Inc. (NASDAQ:PGNX): Engages in the development and commercialization of therapeutic products to treat the unmet medical needs of patients with debilitating conditions and life-threatening diseases in the United States and internationally. Market cap at $297.76M, most recent closing price at $4.28.
Net institutional purchases in the current quarter at 5.0M shares, which represents about 8.64% of the company's float of 57.84M shares.
SMA 20: 2.59%
SMA 50: 12.48%
SMA 200: 0.31%
Major holder: Federated Investors, Inc. at a 19.49% stake.
4. Sonus Networks, Inc. (NASDAQ:SONS): Provides voice and data infrastructure solutions for wireline and wireless telephone service providers. Market cap at $946.21M, most recent closing price at $3.85.
Net institutional purchases in the current quarter at 23.0M shares, which represents about 10.57% of the company's float of 217.60M shares.
SMA 20: 8.51%
SMA 50: 13.53%
SMA 200: 22.65%
Major holder: Empire Capital Management, LLC at a 10.68% stake.
5. RadiSys Corporation (NASDAQ:RSYS): Develops, produces, and markets application-ready software and hardware platforms for Internet protocol (IP)-based wireless, wireline, and video networks markets. Market cap at $116.08M, most recent closing price at $3.22.
Net institutional purchases in the current quarter at 5.1M shares, which represents about 15.11% of the company's float of 33.76M shares.
SMA 20: 2.5%
SMA 50: 4.74%
SMA 200: 9.88%
Major holder: Nierenberg Investment Management Company at an 11.89% stake.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: Kapitall is a team of analysts. This article was written by James Dennin, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.