BOSTON ( TheStreet) -- Small-cap stocks have fallen behind blue chips in the past month, with the Russell 2000 Index dropping 5.3%. However, these companies are positioned to outperform benchmarks.

5. German American Bancorp ( GABC) is a bank in southern Indiana.

The numbers: Third-quarter net income decreased 4% to $3.2 million, or 29 cents a share, as revenue dropped 4% to $20 million. The company's gross margin rose from 66% to 71%, but its net margin remained steady at 16%. The company is adequately capitalized, with $60 million of cash reserves. A debt-to-equity ratio of 1.3 indicates higher-than-ideal leverage.

The stock: German American Bancorp has increased 35% this year, more than the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 14, a discount to the market and regional banks. The shares pay a 3.6% dividend yield.

4. Neogen ( NEOG) sells food safety tests.

The numbers: Fiscal first-quarter net income increased 18% to $4.4 million, or 29 cents a share, as revenue grew 12% to $32 million. Neogen's gross margin rose from 55% to 57%, and its operating margin expanded from 20% to 21%. The company has an ideal financial position, with $24 million of cash and no debt.

The stock: Neogen has climbed 26% this year, outpacing the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio of 33, a premium to the market and health care supply peers. The company doesn't pay dividends.

3. National Bankshares ( NKSH) is a bank in Virginia.

The numbers: Third-quarter net income increased 5% to $3.8 million, or 54 cents a share, as revenue inched up 1% to $15 million. The company's gross margin rose from 69% to 72%, and its operating margin advanced from 44% to 50%. National Bankshares has an ideal financial position, with $35 million of cash and minimal debt.

The stock: National Bankshares has increased 43% this year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 14, a discount to the market and regional banks. The shares pay a 2.9% dividend yield.

2. Hawkins ( HWKN) makes specialty chemicals used in water treatment, industrial production and drugs.

The numbers: Fiscal second-quarter net income declined 2% to $6.7 million, or 65 cents a share, as revenue dropped 17% to $65 million. The company's gross margin rose from 24% to 29%, and its operating margin expanded from 14% to 17%. Hawkins has an ideal financial position, with $37 million of cash and no debt.

The stock: Hawkins has rallied 43% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 9, a discount to the market and chemical peers. The shares pay a 2.6% dividend yield.

1. American Physicians Service Group ( AMPH) sells medical liability insurance and manages investments.

The numbers: Third-quarter net income fell 10% to $6.4 million, or 92 cents a share, as revenue grew 13% to $22 million. The company's gross margin fell from 64% to 49%, and its operating margin decreased from 56% to 43%. American Physicians has an admirable financial position, with $17 million of cash and $6.6 million of debt.

The stock: American Physicians Service Group has risen 7% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 9, a discount to the market and insurers. The shares pay a 1.3% dividend yield.

Now see five mid-cap stocks ready to rally >>>

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