Ten top performing small-cap fund managers name their picks
Aaron Rents Gerald Van Horn / Stratton Management/ Stratton Small-Cap Value Retail appliance renter shows robust same-store sales.
Advo David Kelley / RS Investments/ Partners fund Its junk-mail advertising blitzes prove surprisingly effective for retailers.
Aleris International John Montgomery / Bridgeway Funds/ Ultra-Small Company This fast-growing maker of rolled aluminum excels at recycling.
American Home Mortgage John Richardson / Munder Capital/ Munder Microcap Equity Y This mortgage-lending REIT offers a generous yield of 9%.
Amerigon George Henning / Pacific Advisors/ Small-Cap C Supplies climate-controlled car-seat components; has "no real competition."
Brady Eric Ende / First Pacific Advisors/ FPA Paramount Makes highly durable ID labels for pipes; new CEO is improving prospects.
Cognex Eric Ende / First Pacific Advisors/ FPA Paramount Seeing big demand overseas for its optical gear, which analyzes factory lines.
Cohen & Steers Ron Baron / Baron Funds/ Small-Cap Manager of $22 billion in REIT assets is moving into overseas markets.
Coinstar David Kelley / RS Investments/ Partners fund Self-serve coin counters, gumball machines, and kids' rides are cash cows.
Corinthian Colleges David Kelley / RS Investments/ Partners fund A turnaround play, its for-profit schools can surpass 30% return on capital.
Dollar Thrifty Timothy Todaro / Rice Hall James/ RHJ Small Mid-Cap portfolio Now that rental-car price wars are easing, earnings could jump 40%.
Dress Barn John Montgomery / Bridgeway Funds/ Ultra-Small Company Women's apparel retailer shows strong earnings and stock-price momentum.
DRS Technologies Gerald Van Horn / Stratton Management/ Stratton Small-Cap Value Electronics-component maker getting bigger share of defense spending.
Elk George Henning / Pacific Advisors/ Small-Cap C Its roof shingles are in big demand, thanks to hurricane reconstruction.
Encore Wire John Montgomery / Bridgeway Funds/ Ultra-Small Company Wiremaker is still riding the housing boom; sales growth accelerating.
Essex John Richardson / Munder Capital/ Munder Microcap Equity Y Defense supplier ready to commercialize its cutting-edge military electronics.
Ethan Allen Interiors Robert Fetch / Lord Abbett/ Small-Cap Value A Furniture maker and retailer getting sales boost from new product line.
EZ George Henning / Pacific Advisors/ Small-Cap C Its pawnshops are booming, thanks to Americans' big debt burdens.
Financial Federal Robert Fetch / Lord Abbett/ Small-Cap Value A Provides financing for industrial equipment; consistent double-digit growth.
Flanders Michael Corbett / Perritt Capital Management/ Emerging Opportunities fund Gaining market share in the furnace-filter market.
Four Seasons Hotels Ron Baron / Baron Funds/ Small-Cap Hotel manager lost money in 2005, but earnings prospects remain strong.
Healthcare Services Group Timothy Todaro / Rice Hall James/ RHJ Small Mid-Cap portfolio Nursing-home-services provider steadily growing earnings by 15% to 20%.
HealthExtras John Montgomery / Bridgeway Funds/ Ultra-Small Company Pharmacy-benefits manager sees strong demand as health costs rise.
Innkeepers USA Trust Gerald Van Horn / Stratton Management/ Stratton Small-Cap Value Largest REIT focused on extended-stay hotels could return 20%.
Knight Transportation Eric Ende / First Pacific Advisors/ FPA Paramount Small-load trucker features extremely high operating margins.
Landec Michael Corbett / Perritt Capital Management/ Emerging Opportunities fund Developed new polymers with a wide range of uses, from agriculture to retail.
Meritage Homes John Richardson / Munder Capital/ Munder Microcap Equity Y Fear of housing slump pushed P/E to six, but earnings growth is 20%.
MI Developments David Kelley / RS Investments/ Partners fund Two businesses (commercial leasing and horse tracks) offer high growth.
Mitcham Industries George Henning / Pacific Advisors/ Small-Cap C Leases seismic equipment to drillers; earnings should rise 50% in 2007.
Newpark Resources Michael Corbett / Perritt Capital Management/ Emerging Opportunities fund Oil-services company in the Gulf of Mexico is riding the energy boom.
Oakley Timothy Todaro / Rice Hall James/ RHJ Small Mid-Cap portfolio New CEO is repositioning this chic sunglass maker.
Old Dominion Freight Line John Richardson / Munder Capital/ Munder Microcap Equity Y This Southeast trucker is expanding nationally; steady earnings growth of 15%.
Polaris Industries Eric Ende / First Pacific Advisors/ FPA Paramount This leading maker of snowmobiles and ATVs posts 40% return on equity.
PW Eagle John Montgomery / Bridgeway Funds/ Ultra-Small Company PVC pipemaker lost money for years; now pumping profits.
Quanex Robert Fetch / Lord Abbett/ Small-Cap Value A Maker of building and automotive products posting double-digit growth.
Ralcorp Ron Baron / Baron Funds/ Small-Cap Big player in private-label food business will benefit as industry consolidates.
Rimag Michael Corbett / Perritt Capital Management/ Emerging Opportunities fund New venture with Kodak to offer retail photo kiosks should boost earnings.
Ruby Tuesday Robert Fetch / Lord Abbett/ Small-Cap Value A Took a hit after Atkins craze faded; with new menu, traffic is back on upswing.
ScanSource Eric Ende / First Pacific Advisors/ FPA Paramount Sells bar-code scanners and related equipment; logs above-average growth.
Shuffle Master Ron Baron / Baron Funds/ Small-Cap Makes automatic card shufflers and proprietary games that casinos love.
Spartan Motors Michael Corbett / Perritt Capital Management/ Emerging Opportunities fund Need for safer fire trucks should raise this chassis maker's earnings 35%.
Tenneco John Richardson / Munder Capital/ Munder Microcap Equity Y Sales of its emission-control products benefiting from stricter air-quality laws.
Tetra Technologies Gerald Van Horn / Stratton Management/ Stratton Small-Cap Value Gulf hurricane damage should propel this oilfield service provider's earnings.
Trump Entertainment Timothy Todaro / Rice Hall James/ RHJ Small Mid-Cap portfolio No, Donald, really. New management could double casino operating margins.
Tuesday Morning David Kelley / RS Investments/ Partners fund Closeout retailer is increasingly popular with upscale moms.
Universal Compression Gerald Van Horn / Stratton Management/ Stratton Small-Cap Value Natural-gas compression services should achieve 20% growth in 2007.
US Xpress George Henning / Pacific Advisors/ Small-Cap C Tennessee-based trucker is poised to cash in on growth in the Southeast.
WellCare Health Plans Ron Baron / Baron Funds/ Small-Cap Works with Medicare and Medicaid, whose spending should spur growth.
Werner Enterprises Robert Fetch / Lord Abbett/ Small-Cap Value A Trucker's stock soft because of fuel costs; steady growth should raise P/E.
Youbet.com Timothy Todaro / Rice Hall James/ RHJ Small Mid-Cap portfolio Online horserace betting, legal in most states, offers high growth potential.
From the June 2006 issue