BOSTON (TheStreet) -- Stocks under $5, such as TeamStaff (TSTF) and Majesco Entertainment (COOL), have more than doubled already this year even as most small-cap stocks have been brutalized by economic weakness and global debt woes.Small-cap stocks have been the big winners during the two-year bull market that followed one of the worst worldwide recessions. Money managers argue that now is a time for investors to get defensive and move into less-risky asset classes like large-cap equities. On the other end of the capitalization spectrum, some small-cap stocks have seen outsized gains even as most have underperformed.
10. Sify Technologies ( SIFY) Company Profile: Based in India, Sify Technologies is an Internet service provider. Shares of Sify Technologies spiked higher in April to a high of $8.54 as a high-growth play for investors looking for exposure to India. The company this year has announced partnerships and plans for expansion, and the stock has rallied like fellow India Internet company Rediff.com ( REDF). Both Sify and Rediff.com have fallen steadily since the beginning of May along with the broader market. Current Share Price: $4.48 (Aug. 30) 2011 Total Return: 98% Analyst Ratings: No research analyst has coverage of Sify. TheStreet Ratings also does not have research on Sify.
8. Flexible Solutions International ( FSI) Company Profile: Flexible Solutions makes specialty chemicals that reduce water evaporation from lakes, ponds, reservoirs, commercial pools and swimming pools. Shares of Flexible Solutions ramped higher in each month since April, hitting a 52-week high of $3.39 in July. In early April, the company said revenue rose 29% in the first quarter, which pushed the stock higher. The stock climbed higher again in May after Flexible Solutions announced full first-quarter results. Current Share Price: $2.70 (Aug. 30) 2011 Total Return: 111% Analyst Ratings: Only one firm, Taglich Brothers, follows Flexible Solutions, rating the stock as "neutral" with a $3.20 price target. TheStreet Ratings recently upgraded Flexible Solutions to "buy" from "hold," calling attention to the company's "robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins." TheStreet Ratings has a price target of $3.53.
6. Hansen Medical ( HNSN) Company Profile: Hansen Medical develops medical robotics designed for accurate positioning, manipulation and control of catheters and catheter-based technologies. Shares of Hansen Medical jumped to a 52-week high of $5.28 in July, but the rally began in early February after Philips Electronics purchased the rights to develop and market Hansen Medical's Fiber Optic Shape Sensing and Localization, or FOSSL, technology for an upfront payment of $29 million. Hansen Medical is also eligible for $78 million in future payments. Current Share Price: $3.30 (Aug. 30) 2011 Total Return: 121% Analyst Ratings: JPMorgan and Lazard Capital analysts rate Hansen Medical as a "hold" while Piper Jaffray analysts say the stock is a "buy." TheStreet Ratings rates Hansen Medical a "sell," calling special attention to the company's weak operating cash flow.
4. Interphase ( INPH) Company Profile: Interphase is a telecom-equipment maker. The company provides services for LTE and WiMAX, interworking gateways, packet processing, network connectivity, and security for key applications for the communications and enterprise markets. Interphase shares more than doubled on Feb. 11, a day after the company reported fourth-quarter financial results. The company said revenue in the quarter jumped 24% to $5.8 million as it swung to a quarterly profit. The stock hit a high of $7.59 in March but has been steadily pulling back since. Current Share Price: $4.60 (Aug. 30) 2011 Total Return: 155% Analyst Ratings: There are no research firms covering Interphase currently. TheStreet Ratings has a "sell" rating on the stock, which it has maintained since downgrading the stock from "hold" in July 2009. The latest report says Interphase's primary weakness is "feeble growth in its earnings per share."
2. Majesco Entertainment ( COOL) Company Profile: Majesco Entertainment makes video games mainly for the family-oriented, mass-market consumer. Majesco's run this year started in January when the company announced it had shipped more than 500,000 copies of its Zumba Fitness video game for the Wii, Xbox 360 and PlayStation 3. Later that month, the company announced it regained compliance with the Nasdaq's minimum bid price requirement for continued listing. In early March, shares of Majesco climbed higher after the company posted better-than-expected fiscal first-quarter financial results, with revenue jumping to $48.5 million from $29.2 million in the same period a year earlier. In June, Majesco upped its full-year revenue outlook as it expects to ship 17 new games this year across platforms like the Xbox Kinect, Facebook, Nintendo's 3DS and Apple's iPhone. Current Share Price: $2.60 (Aug. 30) 2011 Total Return: 237% Analyst Ratings: Majesco garners two "buy" ratings from Needham & Co. and Sidoti & Co. Majesco also receives a "neutral" rating from Wedbush. Needham analysts have a $5 price target on the stock while Wedbush has a $4 target. TheStreet Ratings has a "hold" recommendation on Majesco Entertainment. The research report says robust revenue growth, a largely solid financial position with reasonable debt levels and return on equity are strengths that are countered by the company's weak profit margins.