The Microcap Speculator

Many investors track the IBD 100, but every week the newspaper also publishes a list of the top 200 stocks measured purely by IBD’s proprietary composite ratings. According to IBD, the composite ratings combine its ratings for EPS, relative price strength, accumulation/distribution, industry group strength, and sales+profit margins+ROE.

The list is dominated by multi-billion dollar companies, but a few microcap stocks made the cut. Here are the companies appearing this week with a market cap. under $300M.  Click on the symbol to jump to the Yahoo! Finance summary.

This kind of a list, combined with technical specifications for entry and exit and, of course, money management techniques could form the backbone of a nice semi-mechanical system. Food for thought.

DISCLOSURE: No positions.

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Here are a few of my favorite charts from the fastest-growing microcaps list:

After a huge rally, Abatix: ABIX is trading near 52-wk highs. However, peel the chart back another year and fairly strong resistance appears around 14-15. I’ll pass for something with a better risk/reward.

The only thing I don’t like about the chart of Elecsys: ASY is that the stock is not in my portfolio. Every time it looks like it is about to break down, it rallies sharply — the sign of a dominant stock.

Trio-Tech Int’l: TRT…..wow!

There will be no “I’ve fallen and can’t get up” jokes about the chart of American Medical Alert: AMAC.

Wayside Technology: WSTG has made its investors happy.

Traffix: TRFX just broke out, and looks like it has a lot further to go.

DISCLOSURE: No position.

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Every year, Fortune Small Business publishes the FSB 100, its list of America’s Fastest-Growing Small Public Companies. To slice and dice the list, I copied it into a spreadsheet, added the ticker symbol and market cap. for each entry (source: Yahoo! Finance) and calculated a price/sales ratio. The FSB 100 surprisingly had a number of companies with market caps exceeding $1 billion. I was more interested with the smaller companies, so I sorted by market cap. and eliminated the largest. Here are all of the companies on the list with market caps of less than $300 million:

Stay tuned for Part 2, where I review the most interesting charts of the group.

DISCLOSURE: No position.

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