Reporter's Notebook: Small-Cap Confab

Portfolio managers and analysts flocked to New York this week for the Brean Murray, Carret Small Cap Institutional Investor Conference. Stock pickers appeared cautiously hopeful they'd find new ideas among the sometimes ignored smaller-cap stocks.

One of the themes that emerged on the first day was the opportunity for serving moderate income consumers and the average American family -- particularly busy moms. Companies such as Stage Stores (STGS Quote), Kuhlman Company (KHLM Quote) and Capitol Bancorp (CBC Quote), which develops community banks, were among those who pressed the Americana theme.

Claire's Stores (CLE Quote) co-CEO Marla Schaefer gave a solid account of her company, indicating that average sales per square foot of $401 in 2005 will be higher this year. She attributed some of her company's success to the popularity of its jewelry, which enjoys a high margin. Thursday, Claire's reported same-store sales of 9% in January, including a "mid-teens" rise in North America and a "negative low single digits number for Claire's International.

Stage Stores CEO James Scarborough gave one of the more impressive talks. He was dynamic, passionate and informative. The following day, Wednesday, his stock rose on volume more than 50% higher than normal. But on Thursday, Stage Stores shares tanked on tepid 1.5% January same-store sales figures. The consensus estimate was a gain of 2.6%.

I wouldn't be shocked if some of the managers in attendance use the selloff to revisit the stock based on the enthusiastic response to Scarborough's presentation. One manager that I spoke with (who wished to remain anonymous) said that despite the miss, Stage Stores is a stock that he would put in his children's accounts, if he wanted retail exposure. The manager is currently very long retail and wants to scale back before considering Stage. He added that Scarborough, "was just as impressive one-on-one as he was in the group session."

To watch Marc's video version of this column, please click here.