Derek Maupin, co-portfolio manager of the Hodges Small Intrinsic Value Fund, was in our Wall Street office the other day, and he touted four small-cap value names that he anticipated from a fundamental perspective would perform in 2017 -- LGI Homes (LGIH - Get Report) , Hilltop Holdings (HTH - Get Report) , Dycom Industries (DY - Get Report) and Carriage Services (CSV - Get Report) .
Fundamentals is just one approach to looking at the market and securities. Quantitative analysis is another approach, and technical analysis yet another. Looking at these four names from a technical perspective, I come to some different conclusions.
In the one-year daily chart of LGIH above, we can be positive about the future until September, when the chart turns down. The slope of the 50-day average line turns down in early October. The 200-day average was tested in late October/early November and could be tested again in the near future. The on-balance volume line peaked at the end of July and made a lower high when prices made a higher price high in early September. The OBV line has remained weak even when prices bounced this past month.
In the three-year weekly chart of LGIH above, we get additional warning flags about the future price performance of the stock. Prices are still above the rising 40-week moving average line, but with both the weekly OBV line pointing down as well as the moving average convergence/divergence oscillator, a break of the uptrend from the early 2015 low is possible. LGIH would not make it onto my buy list for 2017.
With the daily chart of HTH above, the fundamentals and the technical picture seem to be in agreement. HTH is above the rising 50-day and 200-day moving averages. The OBV line has a positive slope, and the MACD oscillator has been above the zero line for the past two months. With support in the $21 to $23 area, I would prefer to trade HTH from the long side going forward.
If DY is going be a positive-performing security, it will have to put a bearish daily chart behind it. DY gapped lower last month, breaking below both the downward sloping 50-day moving average line and the rising 200-day average. The daily OBV line is neutral at best, and the MACD oscillator is in a sell mode below the zero line. The risk is that DY declines further to $60 or into the upper $50s in the weeks ahead.
Finally, the daily chart of CSV above shows promise, but a pullback would not be a surprise at some point. Yes, CSV is above the rising moving averages and the OBV line has moved up in November, but it has not made a new high for the year as prices have. The MACD oscillator is narrowing toward a take-profits sell signal.
The weekly chart of CSV above is interesting in that it shows a possible inverse head-and-shoulders pattern acting as a continuation pattern. The pattern measures to the $30 to $32 area. With a positive MACD oscillator, CSV could well be the best pick of these four small-cap recommendations.

Employees of TheStreet are restricted from owning individual securities.