BOSTON (TheStreet) -- U.S. stocks with market values of $500 million to $2 billion, so-called small-caps, have delivered an average gain of 25% so far in 2010, placing second after mid-caps, which rose 26%. Still, the top-performing small-caps led the market, with many doubling and some even tripling or quadrupling. Here are 10 of the best small-caps of 2010.
Glimcher Realty Trust
more than tripled in 2010. Glimcher, based in Columbus, Ohio, owns and develops shopping malls. It is structured as a real estate investment trust, or REIT, so it is required to pay out the majority of its income to shareholders.
12-Month Sales Growth: -8.4%
12-Month Net Income Growth: -102%
Cash Flow Multiple: 9 (52% peer discount)
Quarterly Operating Profit Margin: 28%
: Of analysts covering Glimcher, two, or 29%, advise purchasing its shares, three recommend holding and two suggest selling. With mall occupancy of 93% and store sales up 4% in the third quarter, business seems more stable for Glimcher. But, it is running net losses and has a debt-to-equity ratio of 4.1.
expects its stock to rise 8% to $9.
foresees a 16% drop to $7.
has surged 220% in 2010. The Union City, Calif.-based company has grown 12-month sales 25%. Its drug Acthar, used to treat multiple sclerosis, saw a 129% jump in quarterly paid prescriptions.
12-Month Sales Growth: 25%
12-Month Net Income Growth: 7.6%
Cash Flow Multiple: 19 (68% peer premium)
Quarterly Operating Profit Margin: 54%
: Just three researchers follow Questcor, with two rating its stock "buy" and one ranking it "hold."
forecasts that the stock will advance 24% to $19. The shares certainly have technical momentum. They've appreciated 44% in the past three months. Acthar was recently approved by the FDA as a safe treatment for infantile spasms, expanding the drug's revenue potential. It is now approved to treat more than 29 disorders.
shares have advanced 230% in 2010. Trimas makes sealants, screws and engine parts with packaging, industrial and aerospace applications. Its 12-month profit has doubled.
12-Month Sales Growth: 10%
12-Month Net Income Growth: 119%
Cash Flow Multiple: 10 (31% peer discount)
Quarterly Operating Profit Margin: 13%
: Of analysts covering Trimas, four, or 57%, advise purchasing its shares and three recommend holding them. A median target of $22 suggests the stock has run past fair value.
value the stock at $20, implying that it is 13% overvalued. However, its forward earnings multiple of 16 and cash flow multiple of 10 reflect machinery industry discounts of 26% and 31%.
is an Internet media company that publishes travel and entertainment offers, with 20 million subscribers worldwide and countless Web site users. It has North America and Europe units.
12-Month Sales Growth: 20%
12-Month Net Income Growth: 5,427%
Cash Flow Multiple: 40 (105% peer premium)
Quarterly Operating Profit Margin: 21%
: Just two researchers follow Travelzoo, which has a market value of $707 million. One ranks its stock "buy" and one rates it "hold."
, the more reputable of the two, values the stock at $50, suggesting 26% of potential upside. At a forward earnings multiple of 48 and a book value multiple of 17, Travelzoo appears expensive. But its PEG ratio, a measure of value relative to growth, of 0.7 reflects a 30% discount to fair value.
( MIPS) develops embedded processor intellectual property for digital entertainment and wired and wireless communication products. It licenses the property to other companies. Its stock has more than tripled in 2010.
12-Month Sales Growth: 20%
12-Month Net Income Growth: 1,159%
Cash Flow Multiple: 32 (119% peer premium)
Quarterly Operating Profit Margin: 40%
: Three researchers rate MIPS' shares "buy," two rate them "hold" and one ranks them "sell." But, the stock has passed the median target of $13, implying that it is 14% overvalued. The stock is just beneath the highest individual price target, at $15, suggesting a cap on upside. But, business fundamentals remain strong. Quarterly revenue gained 40%. At 29-times forward earnings, the stock costs twice the industry average.
sells microporous membranes, used in separation and filtration processes, to energy and technology companies. They are utilized in lithium and lead-acid batteries.
12-Month Sales Growth: 17%
12-Month Net Income Growth: -177%
Cash Flow Multiple: 16 (4% peer premium)
Quarterly Operating Profit Margin: 19%
: Of analysts evaluating Polypore, six, or 60%, advocate purchasing its shares and four suggest holding them. None are advising clients to sell.
offers the highest price target, expecting the stock to rise another 19% to $49.
rates Polypore "neutral" with a $27 target, suggesting 35% downside. Polypore's forward earnings multiple of 27, book value multiple of 5.4 and sales multiple of 3.1 represent industry premiums.
is a grantor trust with iron ore properties in Minnesota. It derives income from the properties and distributes it to holders. It yields 4.2% with a three-year distribution growth rate of 18%.
12-Month Sales Growth: 263%
12-Month Net Income Growth: 286%
Cash Flow Multiple: 25 (at peer parity)
Quarterly Operating Profit Margin: 98%
: Mesabi is an unusual investment product with seemingly outdated rules. It will continue to pay distributions until the resources at its properties are exhausted. Estimating when that will be is a daunting task. Lured by yield, investors poured into the trust in 2010. Its forward earnings multiple of 19 is on par with the metals and mining industry average. This is a unique investment and its yield is no longer high enough to justify the idiosyncratic risk.
is a semiconductor company, specializing in building chips and integrated circuits that enable connected home entertainment. It has surged 269% in 2010.
12-Month Sales Growth: 58%
12-Month Net Income Growth: 113%
Cash Flow Multiple: 43 (192% peer premium)
Quarterly Operating Profit Margin: 18%
: Of researchers covering Entropic, 15, or 88%, still rate it "buy." One rates it "hold" and one ranks it "sell." A median target of $12.33 suggests a gain of 10%.
predicts the stock will rise 24% to $14.
, on the other hand, sees a marginal advance to $12. A forward earnings multiple of 15 is on par with the peer average. Entropic's book value multiple of 8 signifies a sizable premium.
is a telecom and energy company, based in Newark, N.J. Its telecom platform company sells pre-paid and rechargeable calling cards. Its Genie Energy subsidiary resells natural gas and electricity throughout New York state.
12-Month Sales Growth: 0.1%
12-Month Net Income Growth: 133%
Cash Flow Multiple: 11 (164% premium)
Quarterly Operating Profit Margin: 2.4%
: There are no sell-side analysts covering IDT, which has a market value of just $546 million. Still, its fundamental improvement is apparent. IDT swung to a fiscal first-quarter profit of $16 million, or 70 cents a share, from a year-earlier loss of $3.5 million, or 17 cents. Revenue grew 9.2% to $357 million. Management is considering spinning off its Genie Energy subsidiary and is exploring options to license or sell its VoIP intellectual property.
makes and markets customized truck trailers and related transportation equipment. It also makes steel flatbed and dropdeck trailers. It has posted net losses for three quarters.
12-Month Sales Growth: 0.2%
12-Month Net Income Growth: 40%
Forward Earnings Multiple: 29 (33% peer premium)
Quarterly Operating Profit Margin: -2.5%
: Of analysts evaluating Wabash, five, or 83%, rate its stock "buy." None rank it "hold." One rates it "sell." A median target of $13.80 suggests an impending one-year gain of 14%.
BB&T Capital Markets
Sterne, Agee & Leach
expect the stock to advance 24% to $15. Wabash shares have more than sextupled in 2010, earning investors a tidy sum. They jumped 75% in the past three months.
-- Written by Jake Lynch in Boston.
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