BOSTON (TheStreet) -- Stocks under $5, such as Evergreen Energy (EEE) and Majesco Entertainment (COOL), have more than tripled this year, leapfrogging the broader market and surprising investors who haven't heard of these penny-stock companies.Money managers are arguing that investors should move into less-risky asset classes like large-cap equities after the rapid appreciation small-cap stocks have enjoyed during the two-year bull market. But small-cap stocks continue to perform as well or better than broader market averages. The Russell 2000 index -- a benchmark for small-cap stock performance -- is up 7.5% so far in 2011, matching the performance of the Dow Jones Industrial Average and outpacing both the S&P 500 and Nasdaq Composite.
10. Radio One ( ROIAK) Company Profile: Radio One is a multimedia company that mainly targets African-American consumers. The company owns 53 broadcast stations located in 16 urban markets in the U.S. Shares of Radio One, which traded below $2 at the end of March, jumped in early April after the company closed on a new senior secured credit facility comprised of a $25 million revolving credit facility and a $386 million term loan. On April 18, Radio One announced a $15 million stock repurchase and said that preliminary results show that revenue in the first quarter rose 10.9% from the same period a year earlier. Current Share Price: $2.66 (April 26) 2011 Total Return: 137% Analyst Ratings: Gilford Securities has a "buy" rating and $2.75 price target on Radio One, while EVA Dimensions maintains a "hold" rating on the stock. TheStreet Ratings has a "sell" rating on the stock, which it has maintained for two years. The latest report highlights Radio One's "unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and generally weak debt management."
8. Capital Trust ( CT) Company Profile: Capital Trust is a finance- and investment-management company that specializes in credit-sensitive structured financial products. The company is focused on the commercial real estate industry. The stock spiked in April after Capital Trust announced a debt restructuring deal, which was financed by a new $83 million mezzanine loan provided by an affiliate of Five Mile Capital Partners. Current Share Price: $4.05 (April 26) 2011 Total Return: 161% Analyst Ratings: There are no analysts following Capital Trust. TheStreet Ratings has a "sell" rating on the stock, which it has maintained for two years. The latest report highlights Capital Trust's "feeble growth in its earnings per share, deteriorating net income and weak operating cash flow."
6. USA Technologies ( USAT - Get Report) Company Profile: USA Technologies is a supplier of cashless, remote management, reporting and energy-management services. Shares of USA Technologies ramped higher in January after the company said revenue in its fiscal second quarter jumped 60% from a year earlier to $6 million, while its net loss narrowed to a penny a share from a loss of 19 cents. Shares pulled back slightly in March after USA Technologies announced it raised nearly $11 million in a private placement of common stock. In April, USA Technologies announced a collaboration with Verizon Wireless for connectivity that enables wireless point-of-sale payments at vending machines via credit and debit cards. Current Share Price: $2.89 (April 26) 2011 Total Return: 180% Analyst Ratings: Janney Montgomery Scott is the only research firm with coverage of USA Technologies, rating the stock a "hold" with a price target of $1.25. TheStreet Ratings has a "sell" recommendation on USA Technologies, citing disappointing return on equity.
4. Synthesis Energy Systems ( SYMX) Company Profile: Synthesis Energy builds plants that use proprietary gasification technology to convert low-rank coal and related wastes into higher-value energy products. Shares rallied in March after Synthesis Energy signed an agreement with China Energy Industry Holding Group for a cash investment of $83.8 million to support Synthesis Energy's business strategy in China, including project development and investment. Current Share Price: $4.18 (April 26) 2011 Total Return: 257% Analyst Ratings: Two research shops follow Synthesis, with Deutsche Bank rating the stock a "buy" with a $3 price target. The other firm, Johnson Rice & Co., rates the stock as "equalweight." TheStreet Ratings has a "sell" rating on the stock, which it has maintained for two years. The latest report cites several negative areas for Synthesis, most notably the company's poor profit margins.
2. Evergreen Energy ( EEE) Company Profile: Evergreen Energy is a so-called cleaner coal company. On Jan. 5, Evergreen was granted an extension by the NYSE Arca to regain compliance with listing rules regarding minimum bid price and market value of publicly traded shares. By March 3, Evergreen regained compliance with the listing standards. The stock hit a 52-week high shortly after the company completed a $16 million private placement of common stock. Shares pulled back, though, after Evergreen posted financial results for 2010. Revenue for the year fell to $403,000 from $423,000 in 2009. Current Share Price: $2.57 (April 26) 2011 Total Return: 295% Analyst Ratings: No research firm has coverage of Evergreen Energy. In addition, TheStreet Ratings doesn't follow the stock.