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Three small-cap movers worth watching

Today's Financial News - Posted November 4, 2009

iStock_000007038949XSmallThe markets are moving forward today. While the big guys move by just a percent or two, the small-cap offers phenomenal profit opportunities. Check out these three winners.

By Andrew Snyder, TodaysFinanicalNews.com

Baltimore—(TFN): It has been a week of nauseating ups and downs. For investors in the right spot, specifically the small-cap market, it has been a very profitable week.

Shares of Pacer International (NASDAQ:PACR) are up by over 50% after the intermodal and logistics provider tossed two pieces of good news to the bulls.

First, Pacer finalized a deal with Union Pacific (NYSE:UNP) which creates an additional $30 million in new cash flow for the $140 million firm. The company plans to use the proceeds to pay down a credit line by about 50%. A good move in this credit-tight economy.

But even better than the shoring up of the corporate balance sheet was the news that company remained profitable during a volatile quarter. While most analysts expected a small loss, Pacer managed to rack in profits of $600,000 thanks to revenue of $418.7 million. The Street expected a top-line figure of just $402 million.

If you are a fan of Warren Buffett’s big move in the railway industry yesterday, you will like Pacer. It’s the small-cap version of going “all-in” on the American economy.

Finally, excitement from IT

Another company putting up big gains today is Agilysys (NASDAQ:AGYS). Shares of the IT solutions provider soared by over 40% during the session.

Strong growth in hardware and software sales led the company to operating income of $4.3 million, up from last year’s corresponding period’s loss of $1.9 million.

Interestingly, while material sales rose, support sales plummeted by nearly 33%. This is an important trend to watch as companies nationwide try to do more with less.

Finally put Rehabcare Group (NYSE:RHB) into your ticker and check out the action. Shares of the healthcare facility provider are up by over 25% on the news that the company is laying out $570 million to get its hands on Triumph Healthcare, a Houston-based long-term care provider.

This is an interesting deal because it goes against the grain on a couple of fronts.

First, shares of the acquirer are “supposed” to drop on acquisition news. Today’s deviation from the norm is strong evidence that investors believe the combined companies have much more profit-generating power together than they did separately.

This is also an interestingly time move because of the great healthcare debate taking place across the nation. By making such a strong move, Rehabcare is signally it has no fears of major detrimental changes on the way.

Only time will tell.

For now, all three of these big movers should be at the top of your watch list. The small-cap world is hot and getting hotter.


Next Article: When to sell for monstrous gains on natural gas

Posted by Andrew Snyder · Filed Under Featuring..., US Stocks and Markets 

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