Small-Cap Stars: How Investors Could’ve Doubled the Performance of This Bull Market

Equities Editors Desk |

As the S&P 500 and Dow Jones Industrial Average have repeatedly hit new all-time highs throughout the course of the year, investors in the broader market have enjoyed a nice return in the double digits. Three quarters of the way through 2013, the S&P 500 has produced an impressive return of just under 16 percent year-to-date, while the Dow turned in a little over 13 percent during the same time span.

While those performances are nothing to sneeze at by any means, investors looking to generate more robust profits with opportunities for real wealth-creating potential may have done better with a more strategic approach.

It is with that in mind that Equities.com introduced the Small-Cap Stars earlier this year. As a comparison, the cumulative performance of the Stars have generated a year-to-date return of 29.85 percent—essentially doubling the broader market’s return during that time.

Small-cap stocks in general have always been one of the most attractive arenas for investors seeking names with the potential to double, triple, and perhaps even achieve the holy-grail status of the “ten-bagger”. But while the overall small-cap space presents unparalleled profit potential, the risk is typically significantly higher as well.

The selection process of the Stars is based on a proprietary methodology developed by the Equities.com research division. The goal was to pick the best names the small cap space had to offer, screening through thousands of potential candidates for the opportunities that presented the highest potential reward with the lowest risk profile.

Each year, a new class of companies that fit the proprietary research model will be unveiled. Be sure to follow Equities.com’s ongoing coverage of the Small-Cap Stars to understand just how these stocks make the cut, and more comprehensive analysis of the performance and components.

To start off, here is how the Small-Cap Stars have performed by sector year-to-date:

Basic Materials: 14.30%  
Consumer Goods: 25.32%  
Financials: 30.89%  
Healthcare: 31.78%  
Industrial Goods: 35.24%    
Technology: 27.06%  
Services: 44.36%  

Top Individual Performers in Each Sector:

Basic Materials:  Ferro Corp (FOE) , 119.58%   
Consumer Goods:  Kandi Technologies Group (KNDI) , 93.42%  
Financials:  MGIC Investment (MTG) , 144.97%    
Healthcare:  Lannett Co Inc. (LCI) , 339.10%    
Industrial Goods:  National Technical Systems (NTSC) , 192.20%  
Technology: Evestnet: (ENV) , 126.74%
Services: Gray Television Inc (GTN) , 240.61% 

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ENV Envestnet Inc 39.42 0.52 1.34 117,412
FOE Ferro Corporation 13.21 0.05 0.38 692,319
GTN Gray Communications Systems Inc. 11.39 -0.04 -0.35 404,519
KNDI Kandi Technologies Group Inc. 6.28 0.01 0.16 242,227
LCI Lannett Co Inc 32.32 0.89 2.83 1,122,331
MTG MGIC Investment Corporation 7.99 0.09 1.14 3,839,527
PSSGF P S G Group Ltd Ord 16.70 0.00 0.00 0

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