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Investing Specialists

A Stock for Your Radar from Our Small-Cap Superstars

We provide an update on our performance and add a stock to our watch list.

Mentioned: , , , , , , , , ,

As we discussed in previous articles, one of the best and easiest ways to screen for new investment ideas is by monitoring the activity and holdings of successful fund managers. The aim of Morningstar's Small-Cap Superstars is to combine some of the best ideas from our favorite small-cap fund managers with our fellow analysts here at Morningstar. (Click to subscribe to free Small-Cap Superstars e-mail alerts.)

Performance Update
We launched Small-Cap Superstars a little more than a year ago and have been encouraged by the performance of our stock picks in this very difficult market. An investor buying equal stakes in our stock picks, at the time of our recommendations, would have preserved his or her capital and even generated a modest profit as of Oct. 14, 2008. Considering that our benchmark, the Russell 2000, is down nearly a third since our first article was published, we consider this a resilient performance. Plus, we see further upside for all of our stock picks, which average a price/fair value ratio of just 0.56.

 Small-Cap Superstar Picks
 Morningstar
Rating*
Size of
Moat
Uncertain
Rating
Price/
FV Est*
Total
Return
(%)**
+/-
Russell
2000
UCBH Holdings (UCBH)NoneExtreme0.84162.4181.7
Navigant Consulting (NCI)NarrowMedium0.7226.458.8
Cimarex Energy (XEC)NarrowMedium0.546.839.2
Whiting Petroleum (WLL)NarrowHigh0.43-1.930.5
Markel (MKL)NarrowHigh0.59-9.412.7
Carter's (CRI)NoneMedium0.65-20.811.6
Administaff (ASF)NarrowVery High0.51-25.6-2.5
Int'l Speedway (ISCA)WideMedium0.52-36.9-5.8
Amer Reprographics (ARP)NarrowMedium0.38-40.3-7.9
Pinnacle Entertain (PNK)NoneVery High0.45-52.3-33.1
* as of 10-14-08
** Total return from eve of article publication date first highlighting the stock pick (10/2/2007 for WLL, XEC, NCI, ARP, and CRI; 10/30/2007 for ISCA; 6/30/2008 for UCBH and PNK; 7/29/2008 for MKL; and 8/26/2008 for ASF) to 10/14/2008

John Owens does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.