Welcome!

Blog Feed Post

Today’s Worst Small Caps Could Be Tomorrow’s as Well - CHSI, UFPI, SKYW

Don’t hear me wrong - all sectors, sizes, and industries stunk today. A few small caps, however, really got whacked. In some cases, I think today’s pounding is parts of a longer-term punishment that’s best left untouched unless you’re looking to short some of these tickers. Here’s today’s bottwom dwellers… the five worst small cap (from the S&P 600) groups.

5/27/09 - Worst Small Cap Industries

5/27/09 - Worst Small Cap Industries

The distributors I’m not concerned about. Tey’ve had a good week, and a  good year to boot, so I’ll give ‘em a break. I’ll also give the office REITs a break too, since the intermediate-term results are decent.

The rest of these small cap industries though…. well, from a technical standpoint, it looks like they’re poised to sink some more before rebounding

Each take is labeled, so if there’s a certain group you’re curious about, feel free to go straight there.

Life & Health Insurance

05/27/09 - Small Cap Life & Health

05/27/09 - Small Cap Life & Health

The S&P Small Cap Life & Health Index peaked a few weeks ago after a solid March/May rally. I don’t see any hints on this chart that we’re going to make a rebound in the near future.

The stocks that make up the index include AmeriGroup Corp. (AGP), Catalyst Health Solutions Inc. (CHSI), Healthspring Inc., (HS), just to name a few. All their charts look the same though - overextended, and now entering a corrective period.

Could solid fundamental results stop this technical pullback before it gets started?

You could make a decent case for a couple of exceptions, but I don’t see results improvement that would actually matter… the stocks are cheap at current levels, and forward-looking P/Es look even cheaper. What’s left to improve? And, that’s the problem.

Perhaps nobody trusts the estimates. Or, maybe investors are just sick of one-time charges that appear to not just be one-time charges. It doesn’t matter either way… the stocks are falling despite decent valuations.

05/27/09 - Life and Health Insurance Stats

05/27/09 - Life and Health Insurance Stats

That said, I’ve still got insurance names on my list of long-term (very long term) undervalued picks

Forestry and Wood

05/27/09 - Small Cap Forestry

05/27/09 - Small Cap Forestry

Owning small cap forestry and timber stocks like Deltic Timber Corp. (DEL) and Universal Forest Products Inc. (UFPI) hasn’t been easy in May. The S&P Small Cap Forest Products Index is down 21.4% so far, and the month doesn’t end for two more days.

Like the life and health insurance group pullback, there’s not much technical evidence a rebound is in the works. This was one of those tortoise-like humps that usually put things into motion for weeks.

As far as valuations go, honestly, I’m surprised any of these stocks managed to rise at all. Analyst estimates - if they’re right - show these stocks are ridiculously expensive. And, I think the estimates are closer to being right than not.

05/27/09 - Small Cap Forestry Stats

05/27/09 - Small Cap Forestry Stats

Point being, Deltic and Universal Forest could be trouble for a while.

Airlines

05/27/09 - Small Cap Airlines Stats

05/27/09 - Small Cap Airlines

Another bad month for airlines - what a surprise.

The S&P Small Cap Airline Index is off by more than 14% for May so far - and is one of the biggest losers year to date as well. As you can see on the chart, the index is also trapped in a bearish trading range  (and recently retreated from the upper edge of that range).

Nope, it’s not looking too good here in terms of the technicals.

It’s sad, too. Many of these airlines are very well run, and a few have remained profitable. Also, with oil hovering at palatable prices, I’d like to believe these companies and their stocks would get some love at last. That’s what I get for thinking.

SkyWest is the only true airline that’s an S&P 600 constituent, so to make the industry analysis meaningful, I’ve dissected all the small caps tagged as airlines.

The numbers tell the harsh tale.

05/27/09 - Small Cap Airlines Stats

05/27/09 - Small Cap Airlines Stats

Could the economy be the problem? Maybe, but some airlines managed to turn a profit, so I don’t want to generalize too much. Like I said earlier, some of these companies are well run, while others aren’t. It looks like the well-run airlines are being dragged down by the poorly-run airlines. Seeing as how they usually move as a group, I can’t be optimistic about any of these airlines until the majority of them start to improve… and that’s an economic function.

If you still want to jump into an airline stock though, Allegiant Travel Co. (ALGT), SkyWest, and Atlas Air Group Inc. (AAWW) have the right fundamentals, though two of them fall short in the technical category. Atlas Air Group looks like it’s rising more than falling though.

Hawaiian Holdings Inc. (HA) is also on the rise, but there’s only a minimal amount of information regarding the company. That can make it tough to keep tabs on.

Read the original blog entry...

More Stories By James Brumley

James Brumley is a freelance writer and registered investment advisor. He began his career as a broker with a major Wall Street firm, where fundamentals and long-term holding periods were core strategies. After that, he switched gears completely, becoming an analyst at a short-term trading newsletter that focused on technical analysis. He now manages client money using the best of both philosophies. His company, Bluegrass Portfolio Management, offers investors an opportunity to reap superior returns with minimized risk.

Latest Stories
While the focus and objectives of IoT initiatives are many and diverse, they all share a few common attributes, and one of those is the network. Commonly, that network includes the Internet, over which there isn't any real control for performance and availability. Or is there? The current state of the art for Big Data analytics, as applied to network telemetry, offers new opportunities for improving and assuring operational integrity. In his session at @ThingsExpo, Jim Frey, Vice President of S...
DX World EXPO, LLC., a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"We focus on SAP workloads because they are among the most powerful but somewhat challenging workloads out there to take into public cloud," explained Swen Conrad, CEO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"As we've gone out into the public cloud we've seen that over time we may have lost a few things - we've lost control, we've given up cost to a certain extent, and then security, flexibility," explained Steve Conner, VP of Sales at Cloudistics,in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We provide IoT solutions. We provide the most compatible solutions for many applications. Our solutions are industry agnostic and also protocol agnostic," explained Richard Han, Head of Sales and Marketing and Engineering at Systena America, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are focused on SAP running in the clouds, to make this super easy because we believe in the tremendous value of those powerful worlds - SAP and the cloud," explained Frank Stienhans, CTO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"DX encompasses the continuing technology revolution, and is addressing society's most important issues throughout the entire $78 trillion 21st-century global economy," said Roger Strukhoff, Conference Chair. "DX World Expo has organized these issues along 10 tracks with more than 150 of the world's top speakers coming to Istanbul to help change the world."
"Peak 10 is a hybrid infrastructure provider across the nation. We are in the thick of things when it comes to hybrid IT," explained , Chief Technology Officer at Peak 10, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are still a relatively small software house and we are focusing on certain industries like FinTech, med tech, energy and utilities. We help our customers with their digital transformation," noted Piotr Stawinski, Founder and CEO of EARP Integration, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"I think DevOps is now a rambunctious teenager – it’s starting to get a mind of its own, wanting to get its own things but it still needs some adult supervision," explained Thomas Hooker, VP of marketing at CollabNet, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We've been engaging with a lot of customers including Panasonic, we've been involved with Cisco and now we're working with the U.S. government - the Department of Homeland Security," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"I will be talking about ChatOps and ChatOps as a way to solve some problems in the DevOps space," explained Himanshu Chhetri, CTO of Addteq, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, will examine the regulations and provide insight on how it affects technology, challenges the established rules and will usher in new levels of diligence...
SYS-CON Events announced today that SkyScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SkyScale is a world-class provider of cloud-based, ultra-fast multi-GPU hardware platforms for lease to customers desiring the fastest performance available as a service anywhere in the world. SkyScale builds, configures, and manages dedicated systems strategically located in maximum-securit...