Stocks come and go, but every year a few tiny companies get promoted to the small-capitalization indexes. Some eventually make it all the way to the S&P 500.
What they don’t do is go in the space of 18 months from being a penny stock with a market value of $39 million to be worth more than a dozen S&P 500 companies, yet that is exactly what FuelCell Energy Inc. has done. FuelCell isn’t alone. Six members of the Russell Microcap index have risen so much that they are now larger than the smallest S&P stocks. One, real-estate broker eXp World Holdings Inc., has a market capitalization of nearly $10 billion, more than double the smallest S&P stock. When the index reset was announced last year, the largest stock in the index had a market capitalization of $840 million.
Within the index of small companies, the bottom half of which overlaps with the Microcap measure, an astounding 149 stocks are now bigger than S&P 500 members. The largest is Plug Power Inc., up 973% last year and another 65% this year to make the fuel-cell developer big enough to be in the top half of the S&P, worth more than State Street Corp. or Kroger Co.
The size of some of these supposedly teeny-weeny stocks is making a mockery of the microcap indexes and their ETFs. Stunning performance so far this year means few are likely to be upset. The structured differently to the Russell version, is up 23% so far this month alone.
jmackin2 Amazing growth!!! WSJ readers, check out my newest vlog talking about ARK Invest's 'Innovation' ETF...