(Written by Rebecca Lipman. List compiled by Eben Esterhuizen, CFA. Institutional data sourced from Fidelity, short data from Yahoo! Finance.)
The National Federation of Independent Business released a survey on Tuesday showing a 0.8 point increase in small business confidence in September. The change brings the Business Optimism Index up to 88.9.
The NFIB wonders if this increase is a “start of a trend, or a blip.” Rightly so – the increase may have ended a six month decline but it hardly indicates positive sentiment. The increase was largely because fewer small business owners expect inflation-adjusted sales to contract.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Among the survey’s findings, 28% of small-business owners reported poor-sales as their top ranked business problem. However the NFIB reports poor-sales has been the top concern for the past three years.
Furthermore, the net per cent of business owners expecting better business conditions in the next six months landed at -22%, a dismal number that is still up 4 points from August, although 32 points lower than January.
“If that’s your view of the world, of course, you’re not going to hire, you’re not going to buy new equipment, you’re not going to do any of the things we need to get the unemployment rate down and raise GDP,” said NFIB Chief Economist Bill Dunkelberg said in a CNBC interview.
So we were wondering, which small businesses are feeling optimistic about the future? To help find out, we collected data on micro-cap stocks with market caps between $100M – $300M (used as a proxy for small business sentiment).
To refine the list, we collected data on institutional and insider money flows, and identified the companies that have seen significant net buying from those two groups.
Big money managers and insider executives seem to think these small companies have big-time potential–do you agree?
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List sorted alphabetically.
1. Accuride Corp. (ACW): Engages in the manufacture and supply of components to the commercial vehicle industry in the United States, Canada, and Mexico. Market cap of $275.23M. Net institutional purchases in the current quarter at 2.4M shares, which represents about 8.06% of the company’s float of 29.77M shares. Over the last six months, insiders were net buyers of 1,005,420 shares, which represents about 3.38% of the company’s 29.77M share float.
2. Midway Gold Corp. (MDW): Engages in the acquisition, exploration, and development of mineral properties in North America. Market cap of $238.7M. Net institutional purchases in the current quarter at 10.9M shares, which represents about 14.26% of the company’s float of 76.44M shares. Over the last six months, insiders were net buyers of 100,000 shares, which represents about 0.13% of the company’s 76.44M share float.
3. RAIT Financial Trust (RAS): Operates as a self-managed and self-advised real estate investment trust (REIT). Market cap of $141.81M. Net institutional purchases in the current quarter at 28.6M shares, which represents about 76.53% of the company’s float of 37.37M shares. Over the last six months, insiders were net buyers of 101,693 shares, which represents about 0.27% of the company’s 37.37M share float.