Up to this point in 2014, there are 60 stocks that have more than doubled YTD. What did they have in common early in the year?
59 out of 60 had a market cap of under 10 billion at the beginning of the year.
53 out of 60 had a float of under 100 million shares.
49 were trading under 25 at the beginning of the year.
3 are recent IPOs – Radius Heal (NASDAQ:RDUS), Vitae Pharmaceuticals Inc (NASDAQ:VTAE), GoPro Inc (NASDAQ:GPRO)
19 out of the 60 are biotech. Another 4 are drug manufacturers. Industry momentum is a big contributor to individual stock performance.
Gold is about flat YTD. Gold miners have done even worse as a group. After a strong first quarter, they’ve been under tremendous selling pressure. There is one gold miner that has doubled YTD: RIC
13 were foreign companies. China is the most represented, followed by Israel with Supercom Lt (NASDAQ:SPCB), Tower (NASDAQ:TSEM) and Radcom Ltd (NASDAQ:RDCM)
The growth of smart phone usage could be noticed everywhere, even in the stock market. 5 of the doubles in 2014 are semi-conductors: Skyworks Solutions Inc (NASDAQ:SWKS), Vimicro International Corporation (NASDAQ:VIMC), TriQuint Semiconductor Inc (NASDAQ:TQNT), RF Micro Devices Inc (NASDAQ:RFMD), TSEM. Two of the doubles are cyber security companies: Supercom Lt (NASDAQ:SPCB) and VASCO Data Security International (NASDAQ:VDSI).
16 of the 60 doubles in 2014 or 27%, doubled in 2013 too. This is a substantial percentage.
While it is true that long-term momentum (longer than 3 years) tends to mean-revert, 6-12 month momentum tends to continue. Often, the next big winner in the stock market has already doubled in the recent past. For example, take the Chinese Vipshop Holdings Limited (NYSE:VIPS) and Bitauto Holdings Limited (NYSE:BITA). Both quadrupled in 2013, before they went up more than 150% in 2014. VIPS more than doubled in 2012, too.
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