Occam In The News
2007 Small-Cap Winners And Losers
By Goodwin Mainment
January 2, 2008
The small-cap winning streak is over--or, at least, interrupted. After years of outstanding returns, both the Standard & Poor's SmallCap 600 and the Russell 2000 indexes lost 1% in 2007. Both indexes were up 10% heading into early October, but housing woes and the credit crunch made for a rough and volatile fourth quarter. The S&P SmallCap 600 dropped 6% in the last three months of the year, while the Russell 2000 was off 3%. We turned to our computer data to find the small-cap companies with the biggest gains and slides for both the fourth quarter and the full year. We limited our small-cap universe to stocks that started 2007 with market values between $300 million and $1.5 billion. In addition to the market value requirement, we stipulated that each company have starting and ending share prices of at least one dollar. To help avoid illiquid and infrequently traded stocks, we required an aggregate weekly trading volume of 200,000 shares.
Onyx Pharmaceuticals (nasdaq: ONXX - news - people ), the biotechnology firm working with Bayer (nyse: BAY - news - people ) on the much-anticipated cancer drug Nexavar, was the best-performing small cap stock for all of 2007, while Chinese chemical manufacturing concern ShengdaTech (nasdaq: SDTH - news - people ) is the fourthquarter performance star.
SunPower (nasdaq: SPWR - news - people ) deserves a mention for grabbing a spot among both the quarterly and yearly winners. The San Jose, Calif., company, which designs and manufactures solar cells and panels , has seen its shares post sharp gains, thanks to explosive revenue growth and investor enthusiasm for alternative energy stocks.
On the negative side, NovaStar Financial (nyse: NFI - news - people ) ranks sixth among the quarterly losers and first among the small-cap losers for all of 2007. NovaStar, rocked by the credit crunch, recently reported a loss of $598 million, or $64.05 per share, for the third quarter. Management has conceded there is a good chance the New York Stock Exchange will de-list its shares.
Biotechnology companies Protalix BioTherapeutics (amex: PLX - news - people ) and Nastech Pharmaceuticals (nasdaq: NSTK - news - people )are among the biggest quarterly losers. Every year, biotech stocks litter our tables--both winners and losers--highlighting the volatile nature of the industry, as well as small-cap stocks in general.
Fourth-Quarter Small-Cap Winners
Company
Industry
Closing Price ($)
Quarterly Price Change (%)
2008 Estimated EPS
Market Value (Millions)
ShengdaTech (nasdaq: SDTH - news - people )
Chemical Manufacturing
14.45
140
0.64
782
Vonage Holdings (nyse: VG - news - people )
Communications Services
2.30
123
-0.22
357
Restoration Hardware (nasdaq: RSTO - news - people )
Retail (Specialty)
6.57
100
-0.03
255
Evergreen Solar (nasdaq: ESLR - news - people )
Semiconductors
17.27
93
-0.08
1,176
Lindsay (nyse: LNN - news - people )
Constr & Agric Machinery
70.69
61
2.15
830
Abaxis (nasdaq: ABAX - news - people )
Biotechnology & Drugs
35.86
60
0.85
760
Savient Pharmaceuticals (nasdaq: SVNT - news - people )
Biotechnology & Drugs
22.97
58
-1.17
1,202
SunPower (nasdaq: SPWR - news - people )
Semiconductors
130.39
57
2.06
2,323
VISICU (nasdaq: EICU - news - people )
Medical Equipment & Supplies
11.87
57
0.28
386
Adams Respiratory Therapeutics (nasdaq: ARXT - news - people )
Major Drugs
59.74
55
2.42
2,132
Prices as of Dec. 31. EPS: Earnings per share . Sources: FT Interactive Data, Reuters Fundamentals and Thomson IBES via FactSet Research System s.
Fourth-Quarter Small-Cap Losers
Company
Industry
Closing Price ($)
Quarterly Price Change (%)
2008 Estimated EPS
Market Value (Millions)
Protalix BioTherapeutics (amex: PLX - news - people )
Biotechnology & Drugs
3.40
-90
-0.20
210
Force Protection (nasdaq: FRPT - news - people )
Aerospace & Defense
4.68
-78
1.01
312
Nastech Pharmaceutical (nasdaq: NSTK - news - people )
Biotechnology & Drugs
3.80
-71
-1.83
84
Advanta (nasdaq: ADVNA - news - people )
Consumer Financial Services
8.07
-71
1.46
232
Smith & Wesson Holding (nasdaq: SWHC - news - people )
Aerospace & Defense
6.10
-68
0.60
243
NovaStar Financial (nyse: NFI - news - people )
Real Estate Operations
2.89
-67
-3.78
27
Occam Networks (nasdaq: OCNW - news - people )
Communications Equipment
3.56
-63
-0.39
70
Palm (nasdaq: PALM - news - people )
Computer Hardware
6.34
-61
-0.06
658
Hythiam (nasdaq: HYTM - news - people )
Healthcare Facilities
2.93
-60
-0.64
128
Trident Microsystems (nasdaq: TRID - news - people )
Semiconductors
6.56
-59
0.91
379