• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

How Did My 2011 Small-Cap Picks Do?

I focused on identifying profitable small-caps with healthy amounts of cash.
By JONATHAN HELLER
Jan 06, 2012 | 11:06 AM EST
Stocks quotes in this article: IM, TPC, REX, VOXX, PLAB

Overall, 2011 was not a great year for small-caps, with the Russell 2000 index down about 4% and the S&P 600 Small Cap flat. The smallest of the small fared even worse, as the Russell Microcap Index was down 9%.

As in previous years, last January I published a column focused on identifying profitable small-caps with healthy amounts of cash. This screen, which has shown some success over the years, was designed to identify companies with the following attributes:

  • Market caps between $100 million and $3 billion
  • Price-to-earnings ratio less than 15
  • Long-term debt-to-equity ratio less than 50%
  • Profitable during the trailing twelve months and latest fiscal year
  • Cash in excess of 20% of market cap
  • Price-to-book ratio less than 1
  • Quick ratio less than 1
  • All sectors but financials

Not surprisingly, just six made the cut. Value was fairly hard to find in 2011.  But, on average, these stocks performed fairly well since the column ran, up about 13%. 

Four out of the six had positive results. The laggards included the ever-frustrating Ingram Micro (IM), down 6% and Tutor Perini (TPC), down 40%.  The biggest winner was Allied Healthcare International, which was acquired in October for $3.90 share, up 60% since last January. 

Another very strong performer was Rex American Resources (REX), up 45%.  REX is an interesting company, which some may remember as a retailer, that has made the transition into the world of ethanol, with investments in six ethanol plants. The company also owns 24 of its former retail locations, five of which are leased, with the others available for sale or lease. REX's balance sheet is fairly solid, with $87 million, or $9.40 per share in cash, and $73 million in debt.

I'm the first to admit that I'm not crazy about ethanol because I don't believe it is viable long term. Earlier this week, Congress did not renew the 45 cents per gallon ethanol subsidy or the 54 cents per gallon tariff on imported ethanol. Whether this is ethanol's death knell remains to be seen. This could raise some uncertainty for REX, which has been knocking the cover off the ball recently.  Last quarter revenue rose more than 20% to $84.5 million and earnings rose 59% to 70 cents per share.

Rounding out the list of 2011 small-caps with cash, were former net/net Voxx International (VOXX), formerly Audiovoxx, which was up 12% and Photronics (PLAB), which gained 7%. All in all, there were two winners, one big loser and three somewhere in the middle. 

This weekend I'll be crunching the numbers for 2012's list. It should be interesting, as early indications show a healthier number of companies making the cut.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, the author was long IM.

TAGS: Investing | U.S. Equity | Stocks

More from Stocks

Navigating the Cycles of the Market

James "Rev Shark" DePorre
Apr 17, 2021 10:00 AM EDT

How Recency Bias and the Pareto Principle impact your trading decisions.

Market Indices Continue to Hide Crazy Rotational Action

James "Rev Shark" DePorre
Apr 16, 2021 4:41 PM EDT

Fundamentals and valuations are secondary to shifting money into certain sectors.

Is the Market Wrong on Bank of America? Here's What the Charts Say

Bruce Kamich
Apr 16, 2021 2:21 PM EDT

Let's check in again on BAC after its latest earnings.

Liquid Media Group Is a Hidden Gem

Timothy Collins
Apr 16, 2021 1:33 PM EDT

With the options open, I believe the near-term puts offer an attractive play.

Taking Another Look at Twilio's Charts

Bruce Kamich
Apr 16, 2021 1:12 PM EDT

Aggressive traders could begin probing the long side of TWLO.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:05 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How recency bias and the Pareto Principle impact y...
  • 02:42 PM EDT PAUL PRICE

    Wednesday on Real Money Pro

    Make this stock a 'part' of your portfolio.
  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login