3 Recent Big Gainers Kick Off the Dramatic Return of 'Small-Cap Friday'

After getting smacked around in the fourth quarter of last year, small-caps have been on a roll so far in 2019, as can been seen from the chart of the iShares Russell 2000 ETF . iShares Russell 2000 ETF (IWM) View Chart » View in New Window » As I stated at the start of the New Year, small-caps are likely to outperform their larger brethren this year after underperforming them in 2018. Faster earnings growth as well as less exposure to slowing global economic activity and trade tensions with China are some of the reasons for that belief. Today, we are bringing back Small-Cap Friday and talking about a few small-cap names that got nice jolts this week, which should help the shares rally further in the quarters ahead. Late Wednesday the U.S. Food and Drug Administration (FDA) unexpectedly designated T2 Biosystems Inc.'s T2Resistance Panel, a genetic test that detects 13 resistance genes for Gram-positive and Gram-negative pathogens in a blood sample, as a Breakthrough Device. This move allows for more intensive guidance on development from the agency and priority review of the marketing application. This is a nice win for this razor and razor-blade concern and helped drive a 15% rally in T2 Biosystems on Thursday. Each of the company's machines costs hospitals around $100,000 to acquire. T2 estimates that each installed machine will produce $300,000 in annual high-margin revenue from the consumable panels that currently are approved for two indications, the most important of which is for sepsis. Each additional indication or panel obviously increases potential annual revenue from each machine. TG Therapeutics Inc. soared more than 30% in trading Thursday after the company published data from a Phase I study. This trial combined the use of TG Therapeutics' compounds TG-1101 and TGR-1202 and Imbruvica to treat chronic lymphocytic leukemia or small lymphocytic lymphoma. Results were very impressive. After the bell Thursday, TG Therapeutics took advantage of the rally in the stock to initiate a raise of capital. This move will probably bring the stock back down some in Friday's trading but also addresses TG's current financing needs. This multiple shots on goal oncology concern has several milestones coming up this year and in 2020 that could boost the stock further. Finally, we go outside the healthcare sector to an off-the-radar nascent turnaround stock called The Rubicon Project Inc. . The company provides a technology solution that helps websites and applications sell ads programmatically. Specifically, Rubicon generates revenue from the buying and selling of advertising inventory transacted on its platform. More than 80% of U.S. digital display ads were purchased programmatically in 2018. Rubicon Project brought in new management in 2017 after it was caught flat-footed by several trends that hurt its business in 2016. I bought some shares last September after Rubicon seemed to show some traction in its turnaround efforts and the new CEO purchased $300,000 in new shares. On Thursday, Rubicon Project shares popped about 13% on further confirmation that the company's business is improving as fourth-quarter revenue rose a better-than-expected 32% on a year-over-year basis. This improvement was driven by a 43% increase in mobile ad spending that now makes up more than half of overall sales. The company has plenty of cash on the balance sheet and Rubicon Project should be producing GAAP earnings by the end of this year.

3 Recent Big Gainers Kick Off the Dramatic Return of 'Small-Cap Friday'

Small-caps have done better than their bigger brethren so far in 2019, and these three stocks are a reason why.

Columnist Conversation

Sarepta Enters Breakout Territory

Facebook 's Crypto Effort Could Carry Sway in Emerging Markets

Some Hard Figure Forecasts on Facebook's Crypto Initiative

COLUMNIST TWEETS

Please Join or Log In to manage and receive alerts.