If the recent discovery that Snapchat’s founders had turned down buyout offers of $3 billion and $4 billion proved anything, it’s that the future of our markets are likely to be big on ideas in the digital world. And plucking the right ones could be extremely profitable.
However, not all the big new ideas are going to come in the form of social media companies with such explosive growth that they’re already in the mid- to mega-cap range before they even IPO. There’s any number of plucky young software companies out there right now working with solid products that, while maybe not capturing the imagination of teenagers, are generating real value for consumers.
Small-Cap Stars is a portfolio based on isolating those fundamental factors that are most-important to growing small-cap companies. It’s been adjusted to each specific sector, and our portfolio is approaching 36 percent in gains in 2013. Compare that with the S&P 500, up just under 26 percent, and the Russell 2000 Index, the leading index tracking small-cap companies, is up just over 28 percent for that same period. And here’s a look at the top-performing software companies in our Small-Cap Stars.
Callidus Software, Inc. (CALD)
Market cap: $439.7 million
YTD Gain: 130.15 percent
Callidus makes cloud-based sales solutions to improve effectiveness for companies of any size. Their CallidusCloud suite is an SaaS product that covers all aspects of the sales process, including hiring, enablement, collaboration, incentives, coaching and optimization, and content authoring.
Callidus saw shares start to take off in early May after releasing their Q2 earnings report when revenue cleared $30 million, an 18 percent quarter-over-quarter jump and a 28 percent year-over-year increase.
iGate Corporation (IGTE)
Market cap: $1.94 billion
YTD Gain: 101.82 percent
iGate is a provider of integrated, end-to-end, offshore IT technology. The company was actually down on the year about halfway through it, but a major earnings beat in late June sparked the current run that has the stock at more double what it was in January.
PROS Holdings, Inc. (PRO)
Market cap: $1.04 billion
YTD Gain: 90.81 percent
PROS provides software solutions that’s designed to help companies identifies ways to outperform their sectors using big data. The company’s been on a real run since it had a 20 percent pop in February following a strong earnings report. Since then, it’s experience steady and persistent gains.
Zix Corporation (ZIXI)
Market cap: $284 million
YTD Gain: 54.76 percent
Zix is an email encryption company active in the healthcare, financial, insurance, and government service industries. It’s been showing steady revenue that cleared $12 million in the last quarter for the first time.