These Stocks Can Easily Double Your Money

A lot of investors are already gloating about their investing performance in 2010.

Who are these people, you ask? Shareholders of some of these top-performing stocks:



Dividend-Adjusted Return (YTD)

Market Capitalization
on Jan. 1, 2009

Somaxon Pharmaceuticals (Nasdaq: SOMX  )



$25.5 million

Cyclacel Pharmaceuticals (Nasdaq: CYCC  )



$25.4 million

GenVec (Nasdaq: GNVC  )



$127.6 million

Adeona Phamaceuticals (AMEX: AEN  )



$12.0 million

NexMed (Nasdaq: NEXM  )



$27.2 million

Data from Capital IQ, a division of Standard & Poor's.
YTD = year to date.

Notice anything about those companies? They're small. Very small. Now compare their performance with some of the top stocks of the S&P 500 index over the same time:



Dividend-Adjusted Increase (YTD)

Eastman Kodak (NYSE: EK  )



Zions Bancorp






Tyson Foods



Huntington Bancshares (Nasdaq: HBAN  )



Data from Capital IQ, a division of Standard & Poor's.
YTD = year to date.

While the latter results are nothing to sneeze at, particularly given that the overall market has dropped over that period, wouldn't you rather have the former?

Where you'll find the double-baggers
Small caps' tendency to outperform their large-cap brethren isn't just a down-market happenstance. It held true in 2005, 2006, 2007, and 2008, as well.

In any market, the stocks with the most potential for outsized returns (stocks that will double, triple, or even increase your investment tenfold) are not found among large caps, but rather among stocks that are:

  1. Ignored.
  2. Obscure.
  3. Very small.

Why? Because the market's greatest inefficiencies (and, thereby, greatest opportunities) lie hidden among the investments that Wall Street analysts and institutional investors shun only because of their size.

Starting today
Investing in small-cap stocks makes many people nervous, and the past few years' market volatility is sending many investors into the arms of stable large-cap stocks. Which makes now an even better time to buy up shares of oversold small caps.

But not all small caps are equal. You want to make sure you buy small caps that have a rock-solid balance sheet and a solid business model. Both these factors ensure that the company will be around five to 10 years from now, giving it plenty of time to double, triple, or increase tenfold in size.

At Motley Fool Hidden Gems, these are precisely the kinds of stocks we're recommending right now -- and we're putting real money behind our best ideas.

If you'd like to see all the stocks that have made it into our small-cap portfolio, you can find out completely free. Click here for more information.

Already a member of Hidden Gems? Log in here.

This article was originally published June 2, 2009. It has been updated.

Adam J. Wiederman doesn't own shares of the companies mentioned above. The Motley Fool's disclosure policy is a top performer.

Read/Post Comments (2) | Recommend This Article (37)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 19, 2010, at 8:33 AM, prginww wrote:

    Bought CYCC at $1.16 and will hold at least until phase II trials are finished. I suggest also looking at FSI and APT.

  • Report this Comment On March 02, 2010, at 12:23 AM, prginww wrote:

    Own GNVC and I am waiting on 2.70 -2.80 and I am out

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1114084, ~/Articles/ArticleHandler.aspx, 10/24/2016 3:03:23 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,229.26 83.55 0.46%
S&P 500 2,150.80 9.64 0.45%
NASD 5,304.35 46.94 0.89%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 2:27 PM
CYCC $4.92 Down -0.01 -0.20%
Cyclacel Pharmaceu… CAPS Rating: **
GNVC $0.36 Down -0.02 -5.24%
GenVec CAPS Rating: *
HBAN $10.10 Up +0.04 +0.40%
Huntington Bancsha… CAPS Rating: *****
KODK $15.35 Up +0.46 +3.09%
Eastman Kodak CAPS Rating: No stars
NEXM.DL $0.00 Down +0.00 +0.00%
NEXMED, INC. CAPS Rating: No stars
SOMX.DX $0.00 Down +0.00 +0.00%
SYN $1.56 Down -0.04 -2.50%
Synthetic Biologic… CAPS Rating: *