Nothing like taking stock at year’s end. Especially taking stock of stocks. Here, at year’s end, we can definitively say exactly which stocks we all should have invested in at the start of the year, but, for the most part, didn’t.
That said, this isn’t merely an exercise in what could have been. It’s also a reminder of what could be. The reason why any of us are investing in the small-cap market is because these are companies with tremendous opportunity for growth. The returns possible here can’t be found in index funds or blue chips. No, to get this sort of money back on your investment, you have to buck up, accept some major risk, and try to pick the right horse.
So, without further ado, here are the five companies in the small-cap space you probably would have wanted to put your money in at the start of the year. For those of you for whom this is just a victory lap, well played. Be sure to wave as your yacht goes by. For the rest of us, remember that the story of each of these companies could contain the key you’ll need to unlock big returns.
Eagle Pharmaceuticals (EGRX)
2015 Gains: 486.84%
Market Cap on January 2: $276.1 million
Market Cap on December 29: $1.37 billion
Eagle Pharmaceuticals is a specialty pharma company specializing in injectable products. This year saw a number of positive stories for the company, beginning with Teva Pharmaceuticals (TEVA) licensing the rapid infusion drug Bendeka in mid-February, continuing a week later with the FDA giving Eagle seven years of market exclusivity for Ryanodex, and most recently seeing the same organization approve alcohol-free docetaxel.
2015 Gains: 296.53%
Market Cap on January 2: $374.91 million
Market Cap on December 29: $1.2 billion
Exelixis, which focuses on small-molecule treatments for cancer, had a few positive developments this year, including two different FDA approvals for different applications of its drug Cotellic. However, if you want to know what really drove that four-bagger, you need look no further than the mid-July news that a phase-III trial of its drug Cometriq in treating renal cell carcinoma brought back results that showed it 42% more effective than Novartis’ (NVS) Afinitor. That prompted the stock to gap up about 50% and never look back.
Natural Health Trends Company (NHTC)
2015 Gains: 251.44%
Market Cap on January 2: $138.68 million
Market Cap on December 29: $561.67 million
American culture is undergoing a full-on wellness revolution, a trend that is carrying food, beverage, and nutraceutical products alike higher along with it. Natural Health Trends is an e-commerce business that is built on its NHT line of products that include wellness, skincare, and lifestyle. The story of its success this year is relatively simple for anyone who can read an income statement. Revenue spiked quarter over quarter on each report this year, from $40.71 million in Q1, to $69.72 million in Q2, to $80.78 million in Q3.
2015 Gains: 231.66%
Market Cap on January 2: $133.72 million
Market Cap on December 29: $438.06 million
NeoPhotonics develops and sells optoelectronics that are used in communications networks and counts companies like Cisco Systems (CSCO) and Alcatel-Lucent (ALU) as customers. This year’s meteoric rise is really made all the more impressive when you consider it actually reached the $11-a-share threshold in mid-June of this year, only to watch things tumble all the way under $6 by mid-August. The stock rallied, though, and has now cleared $11.20 a share. The company has been showing consistent revenue growth for at least five years, and 2015 may see the company swing into profitability for the first time in its existence.
Eldorado Resorts (ERI)
2015 Gains: 181.48%
Market Cap on January 2: $187.62 million
Market Cap on December 29: $519.72 million
Running casinos always seems like it should be a more profitable business than it is. Well, Eldorado certainly figured it out this year. The company went through a major refinance as well as closing on a 50% stake in MGM’s (MGM) Silver Legacy Resort Casino in Reno, giving Eldorado nearly a third of that Nevada city’s hotel rooms. The big change, though, has been spiking revenue. After years of stagnation, revenues are way up since Q4 of 2014, with the two most-recent quarters coming in especially strong with over $180 million in sales. That number was under $80 million as recently as Q3 of 2014.
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