Which Small Caps Do the Pros Like?

It’s pretty clear that many Pros, thanks to the sums of money they need to invest, are going to favor big cap stocks.  It’s simply easier (and in many cases “safer”) to invest in those names.  But it’s also true that Pros do dabble in small caps, and with small caps typically being a riskier segment of the market — especially in the current climate — some investors find it useful to know which small caps have the Pro “stamp of approval.”

With that in mind, we can use tickerspy’s Ideas & Research section to see which small caps (market caps of under $1 billion) were most popular with the Pros at the end of 2009.

Setting aside the various ETFs that appear near the top of the list, there are a number of intriguing names.  Huntsman (HUN) is a specialties chemical maker seeing a lot of interest from the Pros

Also high on the Pros’ list is beleaguered bond insurer MBIA (MBI) , whose market cap has recently fallen through the $1 billion threshold.  Finally, there’s Magellan Midstream Holdings (MGG), which owns the general partner of master limited partnership Magellan Midstream Partners (MMP).

The above stocks are the small caps that were most like to be among the top, U.S. listed holdings of the Pros at the end of Q4, but we can also look at which small caps were most added to Pro portfolios during Q4.  Again excluding ETFs and companies that were acquired during the quarter, the most added small cap during Q4 was children’s apparel maker Carter’s (CRI).  Also being added to Pro portfolios were Huntsman, genetic analysis firm Sequenom (SQNM) and United Airlines parent UAL (UAUA).

Tags: CRI, HUN, MBI, MGG, MMP, SQNM, UAUA