Bulletin
Investor Alert

Need to Know Archives | Email alerts

June 24, 2020, 2:00 a.m. EDT

Four small companies doing amazing things right now — ‘nobody is paying attention,’ says this fund manager

Critical information for the U.S. trading day

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    NASDAQ Composite Index (COMP)
  • X
    Russell 2000 Index (RUT)
  • X
    Lisanti Small Cap Growth Fund (ASCGX)

or Cancel Already have a watchlist? Log In

By Barbara Kollmeyer, MarketWatch


Getty Images
“Layla” headed to a new home in March in New Orleans — good news for one small-cap company.

The quarter has been stellar, with the Nasdaq /zigman2/quotes/210598365/realtime COMP +0.37% in particular on fire, but the Russell 2000 /zigman2/quotes/210598147/delayed RUT +0.63% hasn’t been far behind.

Russell 2000 — a contender.

Our call of the day from Mary Lisanti, president of Lisanti Capital Growth and manager of the Lisanti Small Cap Growth Fund /zigman2/quotes/200471906/realtime ASCGX +0.64% , says “nobody is paying attention” to the buzz surrounding smaller companies these days.

The 36-year veteran of small-cap research tells MarketWatch that when COVID-19 hit, she started talking to companies about what they what they saw going forward and new opportunities they were finding due to the disruption.

“I don’t think I’ve ever seen a period of time where there’s this much innovation and this much maturity among the smaller companies that are public. They’re run by experienced people, they’ve got good strategies, they’re getting better all the time and to me it’s probably one of the best class of smaller companies I’ve seen,” says Lisanti.

One theme she doesn’t see going away is work-from-home. A top pick in her portfolio is Inphi /zigman2/quotes/208445412/composite IPHI +0.68% , which makes components for semiconductors and optical platforms. She describes what Inphi does as “the picks and shovels that get the bandwidth wider,” needed to build out 5G networks — a five-to-10-year process — and meet demands of at-home workers.

Lisanti also owns Freshpet /zigman2/quotes/204676095/composite FRPT +2.68% , which makes fresh food for dogs and cats. She says she got interested when former Sunny Delight Beverage Chief Executive William Cyr took the helm a few years ago. Cyr did a lot of consumer research, streamlined and stabilized the company and started advertising. The pandemic has boosted Freshpet’s business because lockdowns have driven up pet adoptions, she says.

Then there is all-in-one cloud contact center solution Five9 /zigman2/quotes/209043265/composite FIVN +2.07% , which does its work remotely and has just signed a deal with AT&T /zigman2/quotes/203165245/composite T -1.63% , and shoe maker Crocs /zigman2/quotes/201458716/composite CROX +0.79% , which found a pandemic niche by providing comfy shoes to health-care workers, she says.

“The common thread here is that all of these companies used what was going on as an opportunity to grow business,” says Lisanti.

The chart

Stocks linked to economic reopenings have been faring less well lately than those geared to staying at home, says this chart from LGC’s head of research, Jasper Lawler:

Random reads

Protesters tried to topple a President Andrew Jackson statue.

These hand sanitizers are toxic.

COVID-19 is fueling a boom for secondhand clothing.

Barcelona’s opera house plays to 2,000 plants:

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

Follow MarketWatch on Twitter , Instagram , Facebook.

/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
11,548.28
+42.28 +0.37%
Volume: 2.88M
Oct. 23, 2020 5:16p
loading...
/zigman2/quotes/210598147/delayed
US : US Composite
1,640.50
+10.25 +0.63%
Volume: 1.24M
Oct. 23, 2020 4:30p
loading...
/zigman2/quotes/200471906/realtime
US : U.S.: Nasdaq
$ 28.17
+0.18 +0.64%
Volume: 0.00
Oct. 23, 2020
loading...
/zigman2/quotes/208445412/composite
US : U.S.: Nasdaq
$ 118.32
+0.80 +0.68%
Volume: 556,914
Oct. 23, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$6.14 billion
Rev. per Employee
$507,741
loading...
/zigman2/quotes/204676095/composite
US : U.S.: Nasdaq
$ 117.80
+3.08 +2.68%
Volume: 167,761
Oct. 23, 2020 4:00p
P/E Ratio
1,032
Dividend Yield
N/A
Market Cap
$4.77 billion
Rev. per Employee
$505,857
loading...
/zigman2/quotes/209043265/composite
US : U.S.: Nasdaq
$ 142.28
+2.88 +2.07%
Volume: 443,387
Oct. 23, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$9.30 billion
Rev. per Employee
$262,120
loading...
/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 27.82
-0.46 -1.63%
Volume: 42.63M
Oct. 23, 2020 4:02p
P/E Ratio
18.32
Dividend Yield
7.48%
Market Cap
$198.22 billion
Rev. per Employee
$637,332
loading...
/zigman2/quotes/201458716/composite
US : U.S.: Nasdaq
$ 52.55
+0.41 +0.79%
Volume: 1.05M
Oct. 23, 2020 4:00p
P/E Ratio
29.44
Dividend Yield
N/A
Market Cap
$3.55 billion
Rev. per Employee
$278,955
loading...

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.