Smallcaps Roundup: Shares of Sento and Multi-Fineline Electronix Hit Hard

by: Jonathan Liss

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

SMALL STOCKS: Sento, Winnebago, Entrust Sink

  • Summary: Small stocks crashed and burned for a second straight day on news of escalating violence in the Israeli-Arab Conflict. In trading indicative of how small caps faired, the Russell 2000 index of small-cap stocks lost 1.98% while the Standard & Poor's SmallCap 600 index fell 1.93%. In sector news, suppliers of recreational products were hardest hit as the spike in crude prices fanned existing fears about weakening consumer spending. Motor-home manufacturer Winnebago (NYSE:WGO) fell 5% while recreational-vehicle maker Monaco Coach (MNC) dropped 6.6%. Software fared poorly as well with Transaction Systems Architects (TSAI) shedding 4.9% and Entrust (ENTU) falling 3.3%. In terms of individual performers, information technology-services company Sento (OTC:SNTO) hemorrhaged 54% after announcing that it expects a first-quarter net loss of $1.4 million to $1.5 million. Multi-Fineline Electronix (NASDAQ:MFLX) plunged 23% after the Anaheim circuit-board maker cut its third-quarter earnings estimate, due to higher product and labor costs. Other big decliners included Nastech Pharmaceutical (NSTK) (16%), Sypris Solutions (NASDAQ:SYPR) (18%) and Sirenza Microdevices (OTCQB:SMDI) (15%). Gainers were few and far between. The list included Flow International (NASDAQ:FLOW-OLD), up 6.2%, on stronger than expected fiscal fourth-quarter profits, helped by strong demand; G-III Apparel Group(NASDAQ:GIII), up 5.7%; and Biolase Technology (BLTI) which gained 5.2%.
  • Comment on related stocks/ETFs: Shares of Multi-Fineline Electronix recovered earlier in the month on Morgan Stanley analyst comments that problems at Muli-Fineline competitor MFS Technology Ltd. were not indicative of problems at other circuit board makers like Multi-Fineline. Such optimism proved unfounded yesterday after the company cut 3Q profit estimates by nearly 40% and shares plunged 23%.