The Russell 2000 index, the most common benchmark for small-cap stocks, ended a strong week last week gaining 3% and ending at its highest level in 3 ½ years. Year to date, the small cap index has gained over 7%, just above the YTD returns on Dow Jones Industrial Average [(DIA) 6%] and S&P500 [(SPY) 5%]. Now that the first quarter is behind us, let’s review the top performers from within the Russell 2000 index as well as highlight a few companies that are likely to outperform sector and index peers.
Figure 1: Year-to-date return of the Russell 2000 index. (Source: Google Finance)
(Click chart to enlarge)
Figure 2: The top performing companies in the Russell 2000 index that helped drive the recent small-cap rally.
| | | | Market Cap ($Millions) | YTD Return% | | Ticker | Name | Sector | | Russell 2000 Top 20 Performers YTD | | SRZ | SUNRISE SENIOR LIVING INC | Health | $673 | 128% | | ALJ | ALON USA ENERGY, INC. | Energy and Extraction | $744 | 125% | | SGI | SILICON GRAPHICS INTERNATIONAL | Technology | $649 | 121% | | CIGX | STAR SCIENTIFIC INCORPORATED | Consumer Non Durable | $577 | 115% | | VG | VONAGE HOLDINGS CORPORATION | Technology | $1,010 | 95% | | CPST | CAPSTONE TURBINE CORPORATION | Capital Goods | $445 | 95% | | CLDA | CLINICAL DATA, INC. | Health | $908 | 91% | | BSFT | BROADSOFT, INCORPORATION | Technology | $1,212 | 88% | | DK | DELEK US HOLDINGS, INC. | Energy and Extraction | $738 | 88% | | HERO | HERCULES OFFSHORE, INC. | Capital Goods | $759 | 82% | | SHS | SAUER-DANFOSS INCORPORATED | Capital Goods | $2,465 | 81% | | IPGP | IPG PHOTONICS CORP | Technology | $2,710 | 81% | | PWAV | POWERWAVE TECHNOLOGIES INC | Technology | $760 | 81% | | ICOG | ICO GLOBAL COMMUNICATIONS HOLD | Technology | $677 | 77% | | DSCM | DRUGSTORE.COM, INC. | Consumer Services | $408 | 74% | | PANL | UNIVERSAL DISPLAY CORPORATION | Consumer Durable | $2,143 | 74% | | ROIAK | RADIO ONE INCORPORATED | Consumer Services | $106 | 72% | | ASGR | AMERICA SERVICE GROUP INC. | Health | $238 | 70% | | LNG | CHENIERE ENERGY, INC. | Utilities | $631 | 70% | | AH | ACCRETIVE HEALTH, INCORPORATIO | Consumer Services | $2,632 | 70% | |
Now that we have some insight into companies that have led the pack in 2011 it is only right to provide a watch-list of 20 small-cap companies poised to outperform for the remainder of the year according to key metrics used in The Applied Finance Group’s stock selection process.
We looked for firms that meet the following criteria
- Attractive Valuation
- Expected to Improve Economic Profitability
- Wealth-Creating Management Teams
| | | | Investment | | Ticker | Name | Sector | Opportunity | | 20 Attractive Russell 2000 Companies to Watch | | (NASDAQ:CCIX) | COLEMAN CABLE INC | Basic Material | Attractive | | (NASDAQ:NWPX) | NORTHWEST PIPE COMPANY | Basic Material | Attractive | | (NASDAQ:ACAT) | ARCTIC CAT INCORPORATED | Capital Goods | Attractive | | (NASDAQ:SHFL) | SHUFFLE MASTER, INC. | Capital Goods | Attractive | | (NYSE:TGI) | TRIUMPH GROUP, INC. | Capital Goods | Attractive | | (NASDAQ:HELE) | HELEN OF TROY LIMITED | Consumer Durable | Attractive | | (NASDAQ:HTCH) | HUTCHINSON TECHNOLOGY INC | Consumer Durable | Attractive | | (NASDAQ:UEIC) | UNIVERSAL ELECTRONICS INC. | Consumer Durable | Attractive | | (AMEX:DLA) | DELTA APPAREL, INC. | Consumer Non Durable | Attractive | | (NASDAQ:GIII) | G-III APPAREL GROUP, LTD. | Consumer Non Durable | Attractive | | (NASDAQ:WBSN) | WEBSENSE, INC. | Consumer Services | Attractive | | (NYSE:CDE) | COEUR D ALENE MINES CORPORATIO | Energy and Extraction | Attractive | | (NYSE:IVR) | INVESCO MORTGAGE CAPITAL INCOR | Financials | Attractive | | (NYSE:NFP) | NATIONAL FINANCIAL PARTNERS CO | Financials | Attractive | | (NYSE:SEM) | SELECT MEDICAL HOLDINGS CORP | Health | Attractive | | (NYSE:SKH) | SKILLED HEALTHCARE GROUP, INC | Health | Attractive | | (NASDAQ:SOLR) | GT SOLAR INTERNATIONAL, INCORP | Technology | Attractive | | (NASDAQ:TTWO) | TAKE-TWO INTERACTIVE SOFTWARE, | Technology | Attractive | | (NASDAQ:USAK) | USA TRUCK, INC. | Transportation | Attractive | | (NASDAQ:OTTR) | OTTER TAIL CORPORATION | Utilities | Attractive | |
