It’s been a tough year for small-cap companies thus far in 2014. The recent market pullback hit growth companies hard as investors appeared to be interested in reducing the risk profile of their portfolios, meaning small-cap stocks were among the first to be sold. On the whole, the Russell 2000, the most-respected index for gauging the performance of small-cap stocks as a whole, is down over 1.25 percent in 2014 with significant volatility.
However, despite this down market, several of Equities.com’s Small-Cap Stars are experiencing huge upswings in value in 2014.
The Small-Cap Stars is a portfolio of small-cap companies that feature fundamentals that would appear to give them the best chance for success in the long term. Using the past year’s performance as a guide, each stock is run through a statistical regression to determine which ones have the most in common with the companies in their segment that were most successful in 2013.
Plug Power (PLUG)
Market Cap: $936.51 million
Q1 Performance: 358.06 percent
The best performer of the Small-Cap Stars in Q1 was, without question, Plug Power. The company more than quadrupled in value based on a new deals with Fed-Ex (FDX) and Wal-Mart (WMT) to fit truck fleets with Plug’s hydrogen fuel cell technology.
Market Cap: $391.04 million
Q1 Performance: 110.87 percent
Senomyx is an example of the right product at the right time, developing flavor ingredients that can reduce the sugar content of carbonated beverages by 35 to 50 percent just as dieticians appear to be pointing the finger at sugar as the primary culprit for America’s obesity epidemic. Partnered with PepsiCo (PEP) , Senomyx more than doubled in the first quarter of 2014.
Furiex Pharmaceuticals (FURX)
Market Cap: $879.36 million
Q1 Performance: 107.09 percent
Following small-cap biotech stocks is nothing if not repetitive. Lengthy periods with little action as everyone waits for clinical data followed by a massive swing up or down after that clinical data is released. And, if you were hoping Furiex had a more interesting story to its big gains than that, you’re going to be disappointed. Furiex popped more than 140 percent in a day in early February after its IBS drug returned positive clinical data from a Phase-III trial.
Horizon Pharma (HZNP)
Market Cap: $990.06 million
Q1 Performance: 98.43 percent
Of course, one company that does shake the model for small-cap performance to some degree is Horizon Pharma. The company nearly doubled in value during Q1 of 2014 based on, GASP!, revenue. The company’s current treatments on the market, arthritis drugs Duexis and Rayos, saw solid prescription rates in Q4 of 2013 and it translated to continued increases in revenue, the fourth straight quarter of such increases.
Empire Resorts (NYNY)
Market Cap: $323.57 million
Q1 Performance: 45.87 percent
Compared to the other four, casino and hospitality company Empire Resorts’ big gain seems like small potatoes. However, since the end of Q1, the stock has broken out of an upward wedge patter in the right direction for its investors, fueling gains of just under 25 percent since the end of Q1.