By Jeff Reeves, MarketWatch
Despite the stock market’s recent rally, most U.S. stocks still have losses for the year. And smaller firms are generally doing even worse than their larger peers.
Case in point: The S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.05% index of the 500 biggest domestic companies is down roughly 9% since Jan. 1, but the Russell 2000 index /zigman2/quotes/210598147/delayed RUT +1.69% , which excludes the biggest 1,000 firms listed on U.S. markets and focuses on the next 2,000, is down 20%.
While it’s true that smaller companies tend to be more sensitive to economic downturns, that doesn’t mean every small stock is down and out right now. These nine companies are doing remarkably well with gains of at least 30% so far this year — and in one case, 260%.
These are not microcaps just subject to sentiment swings. They all are U.S.-based companies with average daily volume of more than 400,000 shares and a market capitalization between $400 million and $2 billion. Development-stage biotech stocks are excluded, given the very volatile nature of this subsector.
• Sector: Consumer discretionary
• YTD return: 60%
When you can’t have in-person birthday parties or make brunch reservations on Mother’s Day, sending some love via 1-800-Flowers.com /zigman2/quotes/204552624/composite FLWS +1.28% is the default option.
Sales have surged thanks to coronavirus, but it also has helped that the stock had started 2020 with signs of a turnaround after admittedly disappointing earnings for most of 2019. After hitting a 52-week low close to $11 around Thanksgiving, the stock had topped $14 by New Year’s Day — and since the worst of the coronavirus fears in March, it has been off to the races.
• Sector: Technology
• YTD return: 260%
ACM Research /zigman2/quotes/205487080/composite ACMR -4.94% provides services that remove lingering chemical and particle contaminants from newly manufactured microchips. This business is incredibly specialized but obviously a crucial part of the tech supply chain.
This fast-growing small cap is on track to record nearly 30% revenue growth this fiscal year and another 30% in fiscal 2021 if forecasts hold. Profits are set to surge more than 20% this year and 30% in 2021 on top of that.
• Sector: Industrial
• YTD return: 44%
It may seem dangerous to consider this stock amid talk of possible passenger airline bankruptcies. But Atlas Air Worldwide /zigman2/quotes/200338181/composite AAWW +2.27% is unique for several reasons. The U.S military is a major client, as are private customers who want to avoid public flights. Those business lines remain quite strong. Also, AAWW leases its planes for freight forwarding and “dry leasing” — a pretty attractive model amid strong shipping demand coupled with cheap jet fuel prices.
With earnings revisions hinting at solid margins for the rest of 2020 and a recent labor agreement with its pilots union, this small-cap stock could continue to fly high for the foreseeable future.
• Sector: Consumer staples
• YTD return: 65%
Fast-growing “performance beverage” company Celsius Holdings /zigman2/quotes/205976348/composite CELH +0.23% has a line of zero-calorie fitness drinks that it claims will help accelerate your metabolism and burn body fat. The appeal of this kind of product is obvious, and while the company is still unprofitable, it is plotting nearly 50% top-line growth this year and nearly 30% in fiscal 2021.