Over the last week we have been reviewing some of the “Small Cap Stocking Stuffers” that features the top small cap ideas for 2012 from Credit Suisse. After reviewing the list, it turned out that some stock picks were expected to have upside of 50% or more. We found that the following have 50% upside or did when the firm first added these to the list: Pinnacle Entertainment (NYSE: PNK); Codexis, Inc. (NASDAQ: CDXS); VIVUS Inc. (NASDAQ: VVUS); and Sycamore Networks, Inc. (NASDAQ: SCMR). Other new additions to this were made but the rest did not have an implied 50% upside.
The category of stocks under $1 billion in market capitalization is called by Credit Suisse as the Ultimate Small Caps, and Credit Suisse’s Favorite Ideas are in the following. If applicable, we added in the implied upside, the market capitalization rates, and other color.
Pinnacle Entertainment (NYSE: PNK), in hotels, restaurants & leisure with a $600 million market cap, has an outperform rating, and its $15.00 price target versus a $9.66 target today implies 55% upside. What is interesting is that the Thomson Reuters consensus is actually even higher at $16.06.
Codexis, Inc. (NASDAQ: CDXS), with a $202 million market cap in biotechnology, has a price target of $25.00 on its Outperform rating. Keep in mind that the stock was at $10.41 when it was added to the list in June versus $5.63 today. It is hard to trust exponential gains expectations. To prove the point, the consensus price target is $12.17 today.
VIVUS Inc. (NASDAQ: VVUS), with an $804 million market cap in pharmaceuticals, was commented on this morning even though it was already on the list after being added only on June 14, 2011. At $9.00 after a drop of over 13% this morning makes for a questionable target. The prior $15.00 would imply about 66% upside if it can remain in place. Before the effects of any analyst changes this morning, the Thomson Reuters consensus price target is only $11.33 and the 52-week high is $11.48.
Sycamore Networks, Inc. (NASDAQ: SCMR), worth about $520 million in communications equipment, has a price target objective of $37.00 from Credit Suisse. That is up double from the $18.00 price today and still up 75% from when it was added to the favorite ideas list in June.
JON C. OGG