The Russell 3000 Index is being rebalanced and many cult stocks with low share prices that have a wide following and high trading volume are getting booted off the index. Beacon Power Corporation (NASDAQ: BCON), Capstone Turbine Corp. (NASDAQ: CPST), Finisar Corp. (NASDAQ: FNSR), Rick’s Cabaret International Inc. (NASDAQ: RICK), SIRIUS XM Radio Inc.(NASDAQ: SIRI), TheStreet.com, Inc. (NASDAQ: TSCM), Uranium Resources, Inc. (NASDAQ: URRE), and Vonage Holdings Corporation (NYSE: VG) are among the former high-flier stocks getting removed from the Russell 3000 that have become cult stocks with a large investor base. We have given some color on these changes.
BEACON POWER CORPORATION (NASDAQ: BCON) is being deleted from the “Producer Durables”sector and kicked out of the Russell 3000. This was one of the flywheel plays that is supposed to be a winner on the new energy efficiency trends in the economy. The good news is that this stock could actually come back as a possible “re-review” inclusion as the Russell team makes changes again today and next Friday. At $0.864 on a 4% gain its market cap is $99 million. Unfortunately, this one has been under a “going concern” note for quite some time and its 52-week range is $0.32 to $2.18.
CAPSTONE TURBINE CORP. (NASDAQ: CPST) is being booted off as an “Energy” sector stock. This microturbines player is a “less-dirty” power play, but stock offerings and a lack of sustained growth to get to profitability has taken the oomph away from this stock. But this one still has a deep retail base of stock owners and trades millions of shares per day.
FINISAR Corporation (NASDAQ: FNSR) is being kicked out as a “Technology” sector stock from the Russell 3000. This high-speed data communication subsystems player just never took off as many hoped it would. But it still has a cult stock following as it trades close to 2 million shares per day. At $0.70, its market cap is $337 million and its 52-week range is $0.21 to $1.68. During the tech bubble in 2000 this was a $20 to $50 stock.
Rick’s Cabaret International Inc. (NASDAQ: RICK) is being booted as a “Consumer Discretionary” sector member of the Russell 3000. Rick’s may be the ultimate consumer discretionary example there is as it owns topless bars, i.e. gentlemen clubs. The company is still profitable overall, but even at $6.17 per share its market cap is $57 million and its 52-week range is $2.44 to $21.98.
SIRIUS XM RADIO INC. (NASDAQ: SIRI) needs very little explanation. It has gone to the basement and is being removed as a “Consumer Discretionary” stock in the Russell 3000. Its market cap is north of $1 billion still, but we don’t even presume to know what turnaround would be required for it to get re-added. It seems that the reverse split isn’t going to help matters, at least not as the Index Team at Russell is concerned.
TheStreet.com, Inc. (NASDAQ: TSCM) is being booted off the Russell 3000 as a “financial services” sector stock. If you know Jim Cramer you know TheStreet.com. At $2.22 it has a $67.9 million market cap and the 52-week range is $1.69 to $7.34. The decline in CPMs for ad rates and the major purge of subscriber newsletter operations has knocked this stock down close to a net cash value if you can believe it.
Uranium Resources, Inc. (NASDAQ: URRE) is being booted off as a “Materials & Processing” sector stock in the Russell 3000. This was a more popular stock when uranium prices were through the roof. At $1.42 it has a $80 million market cap and its 52-week range is $0.36 to $4.70. If uranium ever makes a huge comeback, this company might get re-added.
VONAGE HOLDINGS CORP. (NYSE: VG) is being deleted from the “Utilities” sector from the Russell 3000. The company stock has fallen to under $1.00 and is now even under $0.43 since the last rebalance. It would have to rise another 50% or 100% to remain in the index. This one has thousands and thousands of stockholders and millions of Vonage users. But its share price dictates all, and you know the vote. The 52-week range is $0.31 to $1.96.
Again, there are two more opportunities as the other Russell index changes will be amended today and again next Friday. It is always possible that some of these will change.
Jon C. Ogg
June 19, 2009