"Worrying is like a rocking chair. It gives you something to do, but it gets you nowhere."
-- Glenn Turner

It certainly seems that most of us have spent a significant chunk of our recent time worrying. We are consumed by the fear of another bank going under, and of "The Next Great Depression." As a result, we now ignore that, despite our 401(k)s having turned into "201(k)s," there are still companies out there hiring people and making money.

It should not come as a surprise to all Fools out there that, with the help of the CAPS screener, we can find some of these unique names -- even in the supposedly doomed financial sector.

Yes, it is true. Most of the companies coming from today's screen might not get as much air time as big-name giants like Goldman Sachs (NYSE:GS), Citigroup, or Wachovia (NYSE:WB). But my three-year-old son now actually seems to know what FDIC stands for, and he has an uncanny ability to separate Hank Paulson from Neel Kashkari on CNBC. So maybe being smaller than AIG (NYSE:AIG) or Fannie Mae (NYSE:FNM) might not be such a bad thing.

That's why I want to focus on some of smaller names that we still consider worthy of Foolish attention. I chose to focus on just a few key criteria, which seem to be separating winners from losers in today's financial field:

  • A CAPS rating of four or five stars
  • A small market cap ($100M to $2B)
  • Low debt/equity ratios of 0 to 0.5 times
  • A price to book of more than 1 but less than 3 times
  • A price to earnings ratio of between 5 and 30

Why these? Simple logic: First, in today's environment, high leverage equals trouble. Second, despite the commonly accepted wisdom, stock prices declining below book value can often be a warning sign that write-offs or losses lie ahead, which obviously does not spell good news for stockholders. Four- and five-star ratings -- which are predictive of outperformance -- are icing on the cake.

Here are some of the names that made the cut:


Market Capitalization

Long Term Debt/Equity (mrq)

Price/Book (ttm)

Price/Earnings (ttm)

Diamond Hill Investment Group

$125 million




FPIC Insurance Group

$331 million




Knight Capital (NASDAQ:NITE)

$1.3 billion




Morningstar (NASDAQ:MORN)

$1.3 billion




optionsXpress (NASDAQ:OXPS)

$729 million




Stifel Financial

$869 million




Thinkorswim Group

$346 million




Source: Motley Fool CAPS as of 11/21/2008. mrq = most recent quarter; ttm = trailing 12 months.

Of course, this screen is only a starting point in the research process; you can use the CAPS screener to narrow your choices even further.

You might not have heard some of these names before, but our All-Stars certainly have, so come and join us in Motley Fool CAPS to delve into these companies further. Let our 120,000-strong (and growing) CAPS community help you sift through the rubble in search of a few great stocks that might just make it despite all of the "doom and gloom" out there.

For related Foolishness:

Fool contributor Vad Yazvinski, the "Skeptical Capitalist," owns preferred shares of Citigroup, but no shares of the other companies mentioned. Morningstar and optionsXpress are Stock Advisor recommendations. optionsXpress is also a Motley Fool Hidden Gems Pay Dirt pick. The Fool owns shares of Morningstar. The Fool's disclosure policy is always on the menu.