Much like small-cap stocks, micro-caps offer a chance of a high return, but also present more risk and volatility. Micro-caps are generally defined as companies with a capitalization between $50 million and $300 million.
The All-in-One Screener offers more than 150 filters to sort stocks, including a filter to sort by market cap. The following five stocks were some of the most popular micro-caps purchased by the gurus during the fourth quarter.
Liberty Broadband Corp. (LBRDK, Financial)
Liberty Broadband is a holding company that provides digital cable services. Four gurus added to their stakes in the company during the fourth quarter, including Wallace Weitz (Trades, Portfolio) and First Eagle Investment (Trades, Portfolio). Murray Stahl (Trades, Portfolio) holds the largest stake among the gurus at 1.99%, or more than 2 million shares.
The company has been in the red since 2013 and reported losses per diluted share of 49 cents in 2015. The stock traded up by 5% over the past year and is up 15% year to date.
Liberty Broadband spun off from its parent company Liberty Media Corp. in 2014.
Rexford Industrial Realty Inc. (REXR, Financial)
Rexford is a REIT that owns and operates industrial properties in Southern California. Year to date, the stock increased by 12%.
Jim Simons (Trades, Portfolio)’ Renaissance Technologies was the only guru to add the REIT as a new holding during the fourth quarter. Four other gurus including Ken Fisher (Trades, Portfolio) and Chris Davis (Trades, Portfolio) added to their existing stakes during the quarter.
During the fourth quarter, Rexford earned 2 cents per share compared to no earnings during the year-ago quarter. The operating margin was 12.83% in FY 2015, a decline from levels around 20% in 2011 and 2012.
Rexford acquired six industrial properties during the quarter for a total cost of $78.5 million.
Acacia Research Corp. (ACTG, Financial)
Paul Tudor Jones (Trades, Portfolio) initiated a new holding in Acacia Research during the fourth quarter, and four other gurus added to their existing stakes. John Rogers (Trades, Portfolio) is the largest guru shareholder with a 7.1% stake.
Acacia partners with inventors and patent owners to help patent inventions. The stock tanked 63% over the past year and is also down 4% year to date. The price decline was due in part to the company losing a lawsuit many had expected it to win. In Ariel Global Fund’s quarter commentary, Rogers wrote that Acacia lost the first trial because the jury had lacked knowledge of intellectual patents.
“We believe a favorable verdict is merely delayed and not permanently lost; the lawsuit will be refiled in Germany, where it will be decided by a panel of judges who have technical expertise,” he wrote. “We have added to the shares because we remain confident in the original thesis.”
The company lost $3.25 per share in 2015, down from losses of $1.37 the year before.
Hanmi Financial Corp. (HAFC, Financial)
Hanmi is a community bank whose primary market is the Korean-American community, as well as other multi-ethnic populations of Los Angeles, Orange County and San Bernardino County. The stock traded up by 4% over the past year.
Four gurus purchased shares in Hanmi during the fourth quarter. Barrow, Hanley, Mewhinney & Strauss is the largest guru shareholder with a 3.44% stake.
During the fourth quarter, Hanmi Bank earned 46 cents per share, up from 19 cents in the year-ago quarter.
The trailing dividend yield of 2.29% is close to the five-year high, and the payout ratio is 28%.
Alnylam Pharmaceuticals (ALNY, Financial)
George Soros (Trades, Portfolio), John Paulson (Trades, Portfolio) and Mairs and Power (Trades, Portfolio) each initiated a new holding in Alnylam during the fourth quarter. The Vanguard Health Care Fund (Trades, Portfolio) is by far the largest guru shareholder, with a 8.91% stake.
The biopharmaceutical company develops novel therapeutics based on RNA interference. The stock price declined 35% over the last year and 27% year to date.
Alnylam has treatments in Phase 3 of the pipeline to treat TTR Amyloidosis, an inherited and often fatal disease caused by mutations in the TTR gene.
Net loss for the fourth quarter was $1.07 per share, compared to losses of 28 cents per share in the year-ago quarter.
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