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Bottom of the Barrel: Old-Timers Take the Field

It's time for a bit of fall cleaning in the Bottom of the Barrel portfolio.

Last week, I reviewed the names I had added to this portfolio of underfollowed, small-cap stocks and found some nice surprises in the roster. But what about the names that have lingered over the past few years?

Although there are certainly a handful of dogs, many of the small-caps profiled over the past 30-some months have done pretty well. This eclectic group has, for the most part, scraped out nice gains in a difficult market and rose along with the overall market tide in the past several months.

In the Bottom of the Barrel column, I look for companies with unique products and services that are underfollowed by the Street. I generally profile companies that I find somewhat interesting from an investment perspective, but I also sometimes look at companies that readers request as well as names with "special situations." With few exceptions, the Barrel stocks have little Street sponsorship and are often unknown by most investors.

I developed a general rating system for the stocks -- from zero to four barrels -- that represented a quick thought about the strength of the business. Simply, with a quick look at a company's financials, management team, product and service lines and other intangibles, I tried to capture a snapshot of its overall health.

That doesn't always translate into short-term performance. I also break the portfolio into current market stars, average performers and underachievers. The Barrel ratings typically don't change unless the underlying fundamentals of the business undergo a material change. In contrast, the companies are frequently shuffled among the market categories. Finally, a portion of the portfolio is devoted to income-oriented small-caps, which are listed at the end of the table.

Let's take a look at the old-timers in the portfolio. (The table below provides a look at the ratings as the time of the most recent published update.)

Barreling Along
Assessing the old-timers in the Barrel Portfolio
Barrels Company/Ticker Date of Mention AD Current Price Mention Price Change Dividend Yield
Above Average Performance
Energy Partners (EPL:NYSE) 12/5/2002 $10.97 $9.40 16.7%
WebMD (HLTH:Nasdaq) 10/30/2002 10.20 6.51 56.7
Superior Industries (SUP:NYSE) 7/10/2002 43.46 43.87 -0.9
Fidelity National (LION:Nasdaq) 5/8/2002 12.88 10.58 21.7
Cost Plus (CPWM:Nasdaq) 3/6/2002 41.26 25.83 59.7
Coastal Bancorp (CBSA:Nasdaq) 12/12/2001 31.08 27.84 11.6
Average Performers
Huffy (HUF:NYSE) 12/12/2002 $7.20 $6.97 3.3 %
Men's Wearhouse (MW:NYSE) 11/20/2002 28.86 16.22 77.9
Coachmen (COA:NYSE) 8/21/2002 13.31 15.05 -11.6
RARE Hospitality (RARE:Nasdaq)* 2/20/2002 26.32 17.15 53.5
NetBank (NTBK:Nasdaq) 2/6/2002 12.56 13.45 -6.6
Hibbett Sports (HIBB:Nasdaq)* 10/24/2001 25.17 13.36 88.4
Trico Marine (TMAR:Nasdaq) 5/1/2002 $2.40 $8.25 -70.9 %
Bottom of the Barrel Income Portfolio
Ameron (AMN:NYSE)* 11/6/2002 $34.00 $25.30 34.4 % 2.32 %
Hawaiian Electric (HE:NYSE) 7/31/2002 43.65 41.86 4.3 5.83
UGI Corp (UGI:NYSE) 6/26/2002 30.98 31.30 -1.0 3.71
Acadia Realty (AKR:NYSE) 6/5/2002 10.20 7.03 45.1 5.50
Capital Automotive (CARS:Nasdaq) 4/3/2002 29.05 22.95 26.6 5.67
Alexandria Real Estate (ARE:NYSE) 2/13/2002 47.87 40.25 18.9 4.50
Empire District (EDE:NYSE) 1/16/2002 21.95 21.23 3.4 5.79
Integra Bancorp (IBNK:Nasdaq) 1/2/2002 19.67 20.75 -5.2 4.75
*Price adjusted for stock split.
Source: TSC research

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