In case you haven’t had a chance to read the stock updates from each of the weekly Small-Cap All Stars articles, I have aggregated them all below for your convenience.

Value Portfolio

Buckle (NYSE: BKE) posted flat March same-store-sales, but — as usual — beat overly-pessimistic analyst expectations. Fortunately, the company may experience higher sales in the second half of 2013 if Piper Jaffray’s latest survey of teen spending trends is accurate. According to the survey:

Two-thirds of respondents view the economy as consistent to improving, and just over half signaled an intent to spend “more” on key categories of interest, particularly fashion and status brand merchandise.

The pause in spending may be temporary, approximately 53% of upper-income teens plan to spend more on fashion apparel in the coming periods.

Carbo Ceramics (NYSE: CRR) plunged more than 17% in reaction to its disappointing first-quarter financial report. Revenues were down 10% and earnings were down a whopping 42%. The reason is not a surprise: intense price competition from inferior-quality Chinese proppant. Natural gas rig count recently fell to 375, the lowest level since May 14, 1999 — 54% below its 2012 peak of 811 and 77% below its all-time high of 1,606 reached in the summer of 2008. When drillers are hurting, they seek to lower their costs and one way to do so is to cut corners on proppant. Penny wise and pound foolish, CEO Gary Kolstad argues:

Pricing pressures by lower-quality Chinese ceramic imports continued to cause disruptions in the market.  However, imports during the first quarter of 2013 remained at lower levels than the peak witnessed in the fourth quarter of 2011.  We remain focused on educating E&P operators on the risks that using low conductivity Chinese ceramic proppant poses to their well production and estimated ultimate recovery (EUR).

A Goldman analyst is calling for a natural gas recovery and forecasts natural gas prices to hit $4.50/MMBtu during the second half of 2013 – up from $4.01 currently. Natural gas futures have already risen 20% so far this year. Consequently, I expect Carbo Ceramics to receive several analyst upgrades over the remainder of 2013 as natural gas prices continue to rise. Smart-money hedge funds are piling into Carbo Ceramics stock, which is a bullish sign (although it didn’t help today).

Bottom line: Carbo Ceramics offers the best proppant quality on the market and when energy markets rebound, the stock will do extraordinarily well. A long-term perspective is required, but patience will be rewarded.

Diamond Hill Investment Group (Nasdaq: DHIL) hosted a conference call with its portfolio managers on April 17^th. It was great to hear that most of the company’s mutual funds outperformed their benchmarks during the first quarter. Even better, the portfolio managers spent a good deal of time explaining their investment strategy and what stocks look good now. As I wrote in What is a Roadrunner Stock? Part 2: Honest and Competent Management, one sign of a shareholder-friendly company is frequent and informative communications with shareholders.

United Therapeutics (Nasdaq: UTHR) announced on March 25^th that the FDA had rejected for a second time its drug application for an oral form of treprostinil. The stock initially dropped on the news, but has since recovered. The muted investor response is because most analysts did not expect approval and have not incorporated any revenues from oral treprostinil into their stock valuation models.

CEO Martine Rothblatt continues to expect eventual approval and the company has initiated a FREEDOM-C3 drug trial to prove efficacy. Data from the new drug trial is not expected until 2016.

Momentum Portfolio

CommVault Systems (Nasdaq: CVLT) has fallen 10% since the beginning of April on no company-specific news. Rather, it has fallen along with other “big data” stocks on news that Morgan Stanley’s April 4th survey of chief information officers showed weakening spending growth expectations for the second consecutive quarter. 12-month growth expectations in October were 5.1%, followed by 3.6% in the January survey and 3.3% in the April survey.

Momentum stocks that are richly priced often fall harder than the average stock when the overall stock market declines, but the good news is that they often rebound faster when market indigestion is over. I think the selloff in CommVault is irrational and expect the stock to ramp back up. CommVault continues to produce stellar revenue and earnings growth and talk of a takeover continues. Earnings estimates for the next quarter and fiscal year have not been reduced as the industry frenzy for big data continues. 

Furthermore, the federal government is set to increase spending on “big data” in a big way. President Obama’s fiscal 2014 budget only increases federal IT spending by 2 percent, but “big data” projects are a priority and are forecast to grow 47 percent through fiscal 2017. Many federal agencies are starting big data projects because big data analytics can save the government billions of dollars.

• PRGX subcontracts involve only 2-3% of HMS’ total revenue
• Medicare RAC revenues constitute only 10% of PRGX’s total revenue, so the company’s revenue warning must involve PGRX company-specific problems unrelated to the Medicare RAC program.
• PGRX is vulnerable to a part of Medicare RAC that is being drastically changed (subcontractors are being eliminated), whereas HMS’ status as a Medicare regional audit contractor is unaffected.
• HMS has already baked some Medicare RAC disruption into its 2013 guidance.

For all of these mitigating reasons, analysts at Wells Fargo Securities continue to give HMS Holdings the top “outperform” rating, stating that “we believe these shares are compelling given the Medicaid expansion in 2014-15 and significant RAC potential.”

HomeAway (Nasdaq: AWAY) received an upgrade from Morgan Stanley to “Overweight” and an increased price target of $36. The analyst called the company “the most attractive business” in its sector and is very optimistic about the company’s ability to increase the average subscription revenue per listing by double-digit percentages annually for several more years. Furthermore, he is excited about the planned summer launch of a “pay per booking” option that will give property owners an alternative to the current flat-fee annual subscription.

HomeAway also inked a partnership with travelmob, a Singapore-based vacation rental website that provides HomeAway with greater access to the fast-growing Asian-Pacific market. This deal complements its earlier December partnership with China-based Tujia.com. According to Jimmy Rogers, “great fortunes will be made” in Chinese tourism.

PriceSmart (Nasdaq: PSMT) reported excellent second-quarter financials that beat analyst estimates for both the revenues and earnings. Earnings were up more than 22% year-over-year and revenues were up 11%. Investors cheered the news by bidding up the stock price by 2.7% midday on Wednesday (May 10^th). I continue to be very optimistic about the growth potential for this “Costco of Latin America.”

Solarwinds (NYSE: SWI) continues to receive consumer accolades for its high-quality products and customer service. Morgan Stanley upgraded the company because of “accelerating volume growth.”

Western Refining (NYSE: WNR) saw its stock drop more than 13 percent in two days at the beginning of April in reaction to the Environmental Protection Agency (EPA) proposing a new rule requiring that gasoline have 67% less sulfur starting in 2017. The new rule would basically mandate that the stricter gasoline standard already imposed on California be implemented nationwide. Refiner Valero Energy warned that the new rule would require it to spend $300 to $400 million modifying its refineries. Valero may be the exception, however.According to industry sources, only 16 of 111 refineries in the U.S. would need to invest in major equipment to meet the restrictions. Of the remaining 95 refineries, 29 already meet the standards and 66 would need to make only minor modifications.

I agree with a recent article that characterizes the selloff in refining stocks as irrational “panic selling” that offers savvy investors a buying opportunity:

Since these rules do not apply until 2017, it gives these large oil refineries nearly 4 years to adjust accordingly and shift part of that burden to its consumers. Refineries will be able to cut unnecessary costs, and have more incentive to become as efficient as possible. Similarly, the cost of gasoline will rise in order to mitigate the oil refineries’ cost of removing the harmful sulfur.

The company announced a new $200 million share repurchase plan to supplement the $200 million share repurchase announced in July 2012 that has almost been used up. According to Zacks:

We believe the new buyback plan not only highlights the oil refiner’s commitment to create value for shareholders but also underlines the confidence in its cash generating abilities.

The company also finalized the refinancing of its shorter-term, high-cost debt with longer-term, lower-cost debt. The refinancing is very good news that strengthens the corporate balance sheet and, by reducing interest expense, will increase earnings. The crack spread between gasoline and crude oil has narrowed lately, but  remains healthy and appears to have stabilized within its existing 52-week trading range at a level one energy analyst characterizes as “a value area that reflects where the fundamentals really are.”