10 Small Cap 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 poor results, -7.73% versus -2.28% for VBR, a small cap value ETF. However,as of 7/15/10, 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 remains below its 200 day moving average, so the same holds true for this month's screen. Returns exclude pidends, slippage, and commission.

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. The current lists of stocks are below and returns can be tracked real--time on the right hand side of Scott's Investments:

Ticker Name Rank MktCap Industry
MDF Metropolitan Health Networks, 99.01 139.88 Healthcare Facilities
NSIT Insight Enterprises, Inc. 98.53 632.91 Computer Hardware
MEAS Measurement Specialties, Inc. 97.91 218.28 Scientific &Technical Instr.
STKL SunOpta, Inc. [USA] 95.54 366.58 Food Processing
NC NACCO Industries, Inc. 94.61 708.61 Misc. Capital Goods
ABG Asbury Automotive Group, Inc. 94.52 421.53 Retail (Specialty)
IRBT iRobot Corporation 94.15 443.71 Appliance & Tool
UCTT Ultra Clean Holdings, Inc. 93.78 200.37 Semiconductors
RUSHA Rush Enterprises, Inc. 92.96 490.35 Auto & Truck Manufacturers
CCIX Coleman Cable, Inc. 90.16 103.55 Misc. Fabricated Products

Disclosure: No positions