As a group, small-company stocks are providing just-OK returns this year. Those in the S&P SmallCap 600 index are up an average of 4.7%, vs. 4% for larger companies in the S&P 500 index.
But a handful of small companies are producing huge gains. That’s usually the case with small companies, since their returns tend to have what statisticians call a high standard deviation — a broad scattering — compared with large companies. Consider that 24 companies in the SmallCap 600 index have doubled their stock prices this year, compared with only five large companies in the 500 index. The top-gaining small company, retailer SteinMart (SMRT: 9.15, +0.17, +1.89%), is up nearly eightfold in price, while the winner among large companies, XL Capital (XL: 11.93, +0.88, +7.96%), has merely tripled.