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TheStreet Open House

Best Micro-Cap Funds Pay Off Big-Time

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Perritt Micro Cap Opportunities Fund (PRCGX), with assets of $421 million, a return of 23% this year and a 14% annualized return over 10 years. It has a four-star rating from Morningstar.

Its top five stocks are: Gulfport Energy (GPOR), Questor Pharmaceuticals (QCOR), Newpark Resources (NR), Rentrak (RENT) and Oplink Communications (OPLK).

It has three stocks trading around $5 a share in its top 25 stocks:

BioScrip (BIOS), 1.1% of the fund; price: $5.09; down 40% this year; market cap: $270 million.

The company provides services aimed at lowering pharmacy costs for corporate health plans by negotiating with pharmacy plan sponsors and health-care providers. It posted revenue growth of 13% and earnings per share of 95 cents in its most recent quarter. Its price-to-earnings ratio is 5.5 versus 15.4 for the industry. It has 66% institutional ownership.

Star Gas Partners (SGU), 1% of the fund; price: $5.25; up 27.3% this year; market cap: $354 million.

The company is a distributor of home heating oil and offers related services such as heating and air conditioning system installations. It primarily serves the Northeast and Mid-Atlantic states. Star Gas Partners reported revenue of $1.2 billion and net income of $28.3 million for its fiscal year ended Sept. 30. It made several acquisitions in the past year to expand its territory. Perritt is the largest single outside investor in the company with a 1.1% stake.

Gilat Satellite Networks (GILT), 1% of the fund; price, $5.22, up 11% this year; market cap: $211 million. The company provides Internet Protocol (IP)-based digital satellite communication and networking products and services worldwide. Its customers include the U.S. Postal Service and many cable and Internet companies. Net income for the nine months through Sept. 30 was $35.5 million compared with $1.5 million a year earlier, although revenue slipped slightly. Perritt is the second-largest institutional investor, owning 1.5% of outstanding shares.

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