According to The Wall Street Journal, Gartmore Small Cap Fund has risen about 30% in the last year, due, in part, in buying shares depressed by the options back-dating scandals. Shares in companies like Foundry Networks (FDRY), Apple (AAPL), and Take-Two Interactive (TTWO) have jumped up after the initial reaction to announcements that they had options problems.
But, the move its a bit too cute. A number of the company’s stock have not recovered. A Birinyi Associates survey of the 120 companies tied up in the options mess says that most underperformed the major induces.
Good for Gartmore, but not a bright way to screen stocks for good returns.
Douglas A. Mcintyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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