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

Carbo Ceramics (NYSE: CRR) reported fourth-quarter financials that beat analyst revenue estimates. Q4 Earnings of $0.86 per share were down from last year, but in-line with estimates. The stock rallied more than 16 percent in the two days following the news because sales volume of proppant continues to grow (thanks mostly to international expansion) and CEO Gary Kolstad said during the conference call that the company’s business is “close to if not at bottom and we move up from here.” Brokerage firms Global Hunter Securities and BMO Capital Markets both upgraded their opinions on the stock.

This is the second-consecutive quarter where the stock has reacted positively to its earnings announcement. Back in October, the company also beat analyst estimates and the stock experienced its largest one-day price increase in three years. The cockroach theory works for both bad and good news. In the case of Carbo Ceramics, the surprisingly good news in October has generated more good news in January – with more likely to come in future quarters.

Gentex (Nasdaq: GNTX) reported fourth-quarter financials that beat analyst estimates for both revenues and earnings, although both numbers were flat with year-earlier levels. The company’s business is temporarily not growing due to continued weakness in Europe (its largest market segment at 45 percent) and a couple automakers shifting rear camera displays (RCDs) to the radio console and away from Gentex’s rear-view mirrors. Auto production in Europe and Asia (Japan and South Korea) is expected to fall in the single digits in 2013, somewhat counterbalanced by increased production in North America. Overall, the company does not expect much growth in 2013.

The good news is that the company is doing an excellent job cutting manufacturing and administrative costs and thus is improving its already-solid profit margins, which enabled full-year earnings to grow 8 percent (disregarding a one-time litigation expense) despite flat revenue. An upside catalyst is the company’s share repurchase plan, which still has 4 million shares (3 percent of shares outstanding) available to be bought.

Out of an abundance of caution caused by the U.S. fiscal cliff dispute and the European debt crisis, management decided not to buy back any shares in the just-completed fourth quarter — after having repurchased $34 million worth in Q3 — but the company has zero debt and plenty of cash on hand ($450.5 million). With the stock trading at a cheap EV-to-EBITDA ratio of 8.0, share repurchases should resume in 2013 and double-digit sales growth should resume in 2014 alongside a global economic recovery.

The company also increased its quarterly dividend by 8 percent to $0.14 per share. Returning cash to shareholders is a sign of corporate health, as well as a management dedicated to generating wealth. As CEO Fred Bauer stated:

We have a history of paying out a significant portion of our earnings in dividends — approximately 50 percent — and we continue to believe that an investor-friendly dividend rate should be meaningful, sustainable and increase over time, at a rate generally in line with the Company’s net income and operating cash flow.

Amen. I wish all corporate CEOs felt this way.

Buckle (NYSE: BKE) reported that January same-store sales (SSS) dropped 2 percent, but total sales rose 31 percent.  The stock temporarily sold off on the weak January SSS, but I’m confident in this company’s stellar business model. As one article recently declared: “This company is killing it in retail.” The company also earned a spot on Morgan Stanley’s list of 40 companies with “higher odds of a takeover offer.”

Diamond Hill Investment Group (Nasdaq: DHIL) reported that assets under management (AUM) are growing nicely. Between January 3rd and February 4th, AUM increased by $700 million to total more than $10 billion. More AUM means more management fees and higher earnings.

United Therapeutics (Nasdaq: UTHR) announced excellent fourth-quarter financials that blew away analyst earnings estimates by a whopping $0.40 per share and beat on revenues also. Forward revenue guidance for 2013 was re-affirmed at $1 billion. Full-year earnings per share were $5.84, which means that the stock is currently trading at a P/E ratio below 10. Such a low valuation is pretty crazy given that the company’s business is in a strong growth mode, with fourth-quarter earnings more than doubling and full-year 2012 earnings up 56 percent! According to CEO Martine Rothblatt, one of the most impressive results in 2012 was the fact that:

“Our medicines are now being prescribed to more pulmonary hypertension patients in the United States than any other company’s medicine. That’s a high watermark that we’ve achieved against other companies which are much larger and better capitalized than we. I think the reason for this is completely due to the fact that physicians over time have found that the United Therapeutics medicines are the ones that they can rely on to provide superior results for their patients.”

Also noteworthy were Ms. Rothblatt’s comments concerning oral treprostinil — the holy grail of PAH treatment — which:

“We continue to be very, very excited about. We’ve got a game buster clinical trial going on right now. We’re enrolling over 850 patients. All of the major pulmonary hypertension centers in the world are participating in this study. We believe it’s going to result with a statistically significant outcome, showing a delay to clinical worsening when oral treprostinil is dosed in combination with other drugs, which will certainly validate the blockbuster potential for that drug.

My personal belief is as long as we persistently do everything which is right and necessary, oral treprostinil definitely will get approved. And I know it sounds kind of silly to say quitters never win and winners never quit, but we are winners here and we’re not going to quit on oral treprostinil.”

Ten days earlier, the company had announced that it had re-submitted its FDA application for oral treprostinil, which would be the “holy grail” treatment for sufferers of pulmonary arterial hypertension (PAH) if proven effective.

On October 23, 2012, the FDA had refused to approve the oral form of the drug and United Therapeutics sold off 16% on the news. Most Wall Street analysts thought the FDA rejection was the end of the line for oral treprostinil and removed all projected revenues from oral treprostinil from their stock-valuation financial models. News of the re-submission caused the stock to jump 4.3% in one day. In my initial write-up of United Therapeutics, I said that the stock would “soar” if oral treprostinil was ever approved by the FDA, and I continue to believe that would occur — entailing much more than the 4.3% gain that transpired from news of the re-submission alone.

The fact that United Therapeutics re-submitted the application without any new drug trial data suggests either a delusional disorder or the company has received some indication from the FDA that it will approve the drug this time around. The FDA classified the re-submission as a “complete, class 1 response” which offers some hope its prior concerns have been satisfied. Also offering hope is the fact that the FDA has become much more liberal in drug approvals, with 2012 marking the highest number of drug approvals in the past 15 years. We won’t have long to wait for an answer since the FDA has set a March 31st deadline for rendering a decision.

The company also announced a new $420 million share repurchase program after completing its previous $100 million repurchase program in Q4 2012. CEO Martine Rothblatt stated that share buybacks are an “opportunity to return value to our shareholders” and I agree that it is a shareholder-friendly move.  I also like the fact that Ms. Rothblatt has been buying the stock herself over the past year. 

Analysts and investors are warming up to the stock. Hedge-fund legend Joel Greenblatt has made United Therapeutics one of his Gotham Fund’s top-five holdings. Standpoint Research upgraded the stock to “buy” with a $65 price target, and Zacks gives the stock its highest short-term rating of 1, which means “strong buy.”

Momentum Portfolio

HMS Holdings (Nasdaq: HMSY) reported excellent fourth-quarter financial results and the stock jumped 9.1 percent on the news. Earnings beat analyst estimates while revenues matched expectations. CEO Bill Lucia said that the “challenging” year of 2012 was now behind the company and that 2013 looks much better:

So we begin 2013 not only with a strong core business, but also with significant early stage opportunities across the company, including implementing our Medicaid RAC contracts; expanding our footprint in the fraud, waste, and abuse and analytics market; and taking our eligibility verification services to the States and their new health insurance exchanges. These initiatives, together with our leadership in both Medicaid and Medicare, and a steadily growing presence in the commercial market, position us well for delivering sustainable growth in 2013 and for years beyond.

Analysts were worried that the company would reduce 2013 revenue guidance because the award of the Medicare Coordination of Benefits contract to HMS was being protested by the incumbent provider and is under Centers for Medicare & Medicaid Services (CMS) review — a review that may not be completed until the third quarter of 2013. But the company did not alter its previously-issued 2013 revenue guidance, which was a pleasant surprise. On the positive earnings news and outlook, the stock was upgraded by both Dougherty & Co. and TheStreet.com.

Earlier, HMS had reported that it had helped the state of Iowa save $228 million in Medicaid expenses during fiscal 2012 by getting third-party insurance providers to carry their fair share of the bill. The savings were $14 million more than expected. Enforcing third-party liability is a growing area for health-care cost savings.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently released a report recommending that states step up their efforts at enforcing third-party Medicaid liability. More than $4 billion in cost savings nationwide is at stake. Given HMS Holdings’ strong performance in this enforcement area, the OIG report will only strengthen the company’s future business prospects.

Ocwen Financial (NYSE: OCN) has emerged as the top contender to buy a  portfolio of mortgage servicing rights (MSRs) worth $1 billion from Ally Financial, formerly known as GMAC (General Motors’ in-house lending division before it was spun off six years ago). Ally is trying to pay back $17.2 billion in bailout funds received from the U.S. Government, so it is somewhat of a distressed seller and Ocwen may get the MSRs at a good price. According to Zacks, “if Ocwen wins the bid to acquire the aforesaid MSRs, its financial performance would surely improve in the long term.”

The company has also entered into an agreement to acquire ClearPoint — the mortgage lending unit of Gleacher & Co. (Nasdaq: GLCH), a very-troubled New York investment bank. Terms of the deal were not disclosed, but Gleacher conceded that it would be booking a $5 million loss on the sale, so Ocwen is getting a great deal from a distressed seller.

This announcement comes just three days after Ocwen announced that it was selling some non-core assets (i.e., intellectual property, as well as default management and chargeoff services) for $218 million to AltiSource Portfolio Solutions (Nasdaq: ASPS). AltiSource is a company Ocwen spun off in 2009 for the main purpose of having a repository for extraneous mortgage assets that it doesn’t want to keep — and getting AltiSource to pay it cash in return. As Ocwen CEO Ronald Faris puts it:

“Having an outlet for disposition of peripheral mortgage-related assets significantly enhances Ocwen’s competitive positioning for future servicing platform acquisitions that include noncore operations. By selling these noncore assets, Ocwen is able to achieve a greater projected return and continue to focus primarily on growing our core residential and commercial servicing businesses.”

Ocwen is a favorite holding of two billionaire hedge-fund managers: Julian Robertson and Israel Englander — according to recently filed 13F reports. Despite the stock’s strong price momentum, its current price is only 8 times consensus earnings for 2013.

PriceSmart’s (Nasdaq: PSMT) fundamentals continue to improve as the company announced that January net sales increased 10.2% year-over-year and January same store sales were up 3.9%. The company also announced it bought land to open its sixth warehouse club in Costa Rica, which is scheduled to open in the fall of 2013. The company also earned a spot on Morgan Stanley’s list of 40 companies with “higher odds of a takeover offer.”

SolarWinds (NYSE: SWI) reported fourth-quarter financials that scored a trifecta: blew away analyst Q4 estimates for both revenues and earnings, as well as issuing forward guidance that was also better than expected. Both Q4 sales and earnings were up 32 percent year-over-year, and full-year 2012 revenue growth of 36 percent marked an acceleration of growth from the prior 2011 fiscal year. Q4 marked the eighth straight quarter of results exceeding expectations and was just the type of quarterly report that enables a momentum stock like “Dell-like disrupter” SolarWinds to keep chugging higher. No wonder that investment bank Needham & Company has named SolarWinds one of its “Top Ideas for 2013.” 

Western Refining (NYSE: WNR) has been the best-performing Roadrunner stock, up an astounding 24.2% in just three weeks’ time. According to Barron’s Magazine technical analyst Michael Kahn, the stocks of U.S. mid-continent refiners like Western “now are technically overbought for the near term, but long-term chart trends remain positive.”

Slide No. 7 of its Feb. 5th presentation at the Credit Suisse Energy Summit is a powerful reminder of how the geographic proximity of Western’s refineries to shale oil in the Permian Basin (West Texas) and the San Juan Basin (New Mexico/Colorado) is giving the company a tremendous cost advantage over most U.S. refiners.

Non-Portfolio Update:

3D Systems (NYSE: DDD) closed down 9% (after falling 20% intraday) on Monday February 25^th after missing inflated analyst expectations for revenues. Q4 revenue growth of 45% and Q4 earnings growth of 44% evidently wasn’t good enough.

Please note that I didn’t recommend buying DDD in The Next Apple premium report that my research team and I recently wrote, which is why the stock has not yet been added to the Roadrunner Momentum Portfolio. To quote from the premium report:

At a current price-to-earnings ratio of 78.5, 3D Systems is very expensive by historical standards. Even assuming that the industry can continue to grow 30% annually for the next decade, the PEG ratio of 3D Systems is high at 2.5 times.

With the recent price decline, 3D Systems’ stock valuation is looking more attractive, and the 3-D industry in general continues to have a very bright future of growth. It’s worth remembering that Apple suffered through several scary declines on its stock’s long road to becoming a 40-bagger. But I like to give stocks time to stabilize after a price decline, so DDD and other 3-D printing stocks will remain on my watch list for now.