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Archive for October, 2010

Savient: Risky but Promising Small Cap

Posted by admin On October - 31 - 2010

Ian Wyatt submits:

If you’ve never experienced the painful symptoms of gout, consider yourself lucky. The buildup of uric acid crystals in joints has been likened to having skewers pushed into flesh.

It’s estimated that over one million people suffer from gout attacks every year – and if a person with a proverbial skewer sticking out of their joints isn’t a motivated buyer, I don’t know who would be.

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Small Stocks With Potential to Graduate to S&P 500

Posted by admin On October - 31 - 2010

StreetAuthority submits:

by David Sterman

The Russell 2000 index is widely seen as a proxy for small cap stocks. Yet the definition of "small cap" can be quite loose. Riverbed Technology (Nasdaq: RVBD), the Russell 2000’s largest component, is worth more than $4 billion, while a number of members of the index are worth less than $200 million. Historically, the biggest names in this index eventually graduate, often to the S&P 500, where they become one of the smaller companies in this large company index. Such a move often triggers a nice little gain, as index funds need to buy up shares of any new S&P 500 entrants to ensure that they own the whole portfolio.

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Adam Sues submits:

Similar to the FCEC/TOBC merger from a few months back, small community bank mergers can provide a tremendous source for arbitrage profits. Jacksonville Bancorp Inc (JAXB) and Atlantic BancGroup Inc (ATBC) are two tiny micro-cap banks that agreed to merge back in May.

Due to their small size – a market cap of $13m and $2.6m for JAXB and ATBC respectively – the transaction seems to have flown under most investors’ radar and offers attractive returns for patient individual investors who are able to pull off the trade – at least in theory.

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Value Opportunities Created by Mutual Fund Selling

Posted by admin On October - 31 - 2010

ab analytical servicesAlan Brochstein, CFA submits:

With the year almost over, we have just crossed the end of the beginning of the window-dressing season. About half of all mutual funds ended their fiscal year last week, and you can bet that many were busy taking the wounded horses behind the barn over the past month. Who wants to show a loser to their investors? This type of behavior happens all the time, creating opportunities for new buyers. Of course, the next two months may be tough for some of these dogs, as tax-loss selling as well as year-end window-dressing continue to impact them, but it’s worth at least investigating if the selling has left these stocks too cheap to pass up.

I ran a screen designed to identify potential window-dressing victims that could be worth a look:

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The Smart Money’s Top 20 Small-Cap Stocks

Posted by admin On October - 30 - 2010

Kapitall submits:

The following is a list of small-cap stocks that have seen significant institutional inflows over the last three months. All the stocks in this list have market caps between $250M and $300M.

We won’t be going into detailed analysis for each stock. The goal here is to give you a starting point for your own analysis.

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