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While large-cap companies get the most attention, there are more hidden gems among small caps. Since small-cap stocks are less followed by Wall Street and investors in general, fundamental analysts are more likely to discover stocks that trade at a huge discount to their intrinsic values. Last October, Forbes magazine named 20 small-cap stocks picked by six small-cap gurus: Ryan E. Crane, Chris Faber, Brandon M. Nelson, Jim Oberweis, John Rogers and William F. K. Schaff. The definition of small-cap can vary, but generally it is a company with a market capitalization of between $300 million and $2 billion. However, only 14 of Forbes 20 small-cap stocks currently fit this criterion. Here are the top 20 small-cap stock picks by investment gurus and their performances during the past six months:

Stock

Ticker

Market Cap

Return

1

Akamai Technologies

AKAM

7.48B

-13.41%

2

Darling International

DAR

1.80B

53.39%

3

Deckers Outdoor

DECK

3.71B

80.29%

4

Dionex

DNEX

2.00B

32.66%

5

F5 Networks

FFIV

8.63B

15.54%

6

GeoResources

GEOI

0.73B

62.84%

7

HMS Holdings

HMSY

2.28B

36.23%

8

ICF International

ICFI

0.47B

-9.83%

9

Iconix Brand Group

ICON

1.61B

25.21%

10

iRobot

IRBT

0.94B

91.82%

11

Middleby

MIDD

1.65B

23.90%

12

Monro Muffler Brake

MNRO

0.96B

-33.54%

13

Neogen

NEOG

0.96B

16.21%

14

Portfolio Recovery Associates

PRAA

1.43B

26.82%

15

Skyworks Solutions

SWKS

5.23B

30.51%

16

Strayer Education

STRA

1.59B

-7.96%

17

Synaptics

SYNA

0.95B

6.60%

18

Thoratec

THOR

1.79B

-7.95%

19

Under Armour

UA

4.02B

72.18%

20

Volterra Semiconductor

VLTR

0.62B

31.66%

Average

26.66%

*From 10.21.2010 to 04.21.2011

In the last six months 20 picks of six small-cap gurus gained 26.66% versus a 13% gain for S&P 500 (SPY) and 19.69% gain for iShares Russell 2000 Small-Cap Index ETF (IWM). The top performer in this list is iRobot. Jim Simons’ Renaissance had the largest position in IRBT at the end of December. Deckers Outdoor was the second best performer in this list and it is also more popular than IRBT. Chuck Royce, Jim Simons, Cliff Asness and Richard Driehaus had large positions in DECK. Under Armour returned 72% during the past six months. Phill Gross’ Adage Capital was the biggest winner in this case, followed by Jim Simons’ Renaissance. It is interesting to see that Jim Simons’ Renaissance had the largest or second largest position among the top performing stocks. It is because Renaissance employs momentum strategies to generate above market returns. It is the best hedge fund we have come across (check out their returns and alpha here).

Source: 20 Small-Cap Stock Picks by Investment Gurus