Investing 101: Small-Cap Stocks on Winning Streaks

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Do you like to trade with a stock's momentum trends? For ideas on how to separate the winning stocks from the losing stocks, we ran a screen.

We began with stocks from the small-cap sector, with market caps between $300-$500 million, and then screened for those on winning streaks over the last month.

We did this by measuring the number of days on which the stock beat the S&P 500 over the last month and the number of days on which it underperformed the S&P 500. We then compared the longest winning streak in days over the last month to the longest losing streak, and found those stocks with the highest ratios indicating these stocks have been beating the S&P 500.

Business section: Investing ideas
The final list of stocks from the screen is below. Do you think these stocks' momentum will push them even higher? (Click here to access free, interactive tools to analyze these ideas.)

1. Bona Film Group Limited (NAS: BONA) : Distributes films in the People's Republic of China. Market cap at $349.26M. The stock's average daily alpha vs. the S&P 500 index stands at 1.51% (measured close to close, over the last month). During this period, the longest winning streak lasted 6 days (i.e., the stock's daily returns outperformed the S&P 500 for six consecutive days). The longest losing streak lasted two days (i.e., a win streak / losing streak ratio of 3).

2. Neenah Paper (NYS: NP) : Engages in the production and sale of fine papers and technical products worldwide. Market cap at $470.09M. The stock's average daily alpha vs. the S&P 500 index stands at 0.78% (measured close to close, over the last month). During this period, the longest winning streak lasted six days (i.e., the stock's daily returns outperformed the S&P 500 for six consecutive days). The longest losing streak lasted one day (i.e., a win streak / losing streak ratio of 6).

3. NetQin Mobile American Dep (NYS: NQ) : Operates as a software-as-a-service provider of consumer-centric mobile Internet services focusing on security and productivity in the People's Republic of China and internationally. Market cap at $438.54M. The stock's average daily alpha vs. the S&P 500 index stands at 1.34% (measured close to close, over the last month). During this period, the longest winning streak lasted seven days (i.e., the stock's daily returns outperformed the S&P 500 for seven consecutive days). The longest losing streak lasted three days (i.e., a win streak / losing streak ratio of 2.33).

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


Kapitall's Alexander Crawford does not own any of the shares mentioned above.

At the time this article was published Motley Fool newsletter services have recommended buying shares of Neenah Paper. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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