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Hidden Gem #1

Tuesday, 26 Aug 2008 | 12:39 PM ET

Size matters - but money matters more. And unless you've taken a microscope to this market you probably stepped right over the one class of stock that's quietly beating the S&P.

Traders work on the floor of the New York Stock Exchange.
AP
Traders work on the floor of the New York Stock Exchange.

We’re talking small cap and it's time to take a closer look at the tiny tickers that are topping the tape.

While the Big Board racked up nothing but big losses over the last 6 months the Russell 2000 - an index of companies that average a mere $1 billion in market cap - is up a whopping 6%!

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And one lesser name that's been leading the way is Digi International.

With a grand total of 500 employees this little networking company turns outdated information systems such as checkout counters, factory floors, and even traffic lights into 100% wireless wonders, explains Pete Najarian.

Stocks You've Never Heard Of
Small caps beating large Caps by big margins, with the Fast Money crew.

It’s a small Minnesota based company with a great balance sheet, Najarian adds. They have little debt and a great cash position.

And insiders are all getting into this stock which is why it could be a smart buy right now, Najarian concludes.







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Trader disclosure: On Aug 25, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (CSCO) Call Spread, (RIMM) Call Spread, (TIE) Call Spread; Pete Najarian Owns (AAPL) And Is Short (AAPL) Calls; Pete Najarian Owns (XLF) And (XLF) Puts And Is Short (XLF) Calls; Pete Najarian Owns (LEH) Put Spread; Pete Najarian Owns (MS) And Is Short (MS) Calls; Jon Najarian Owns (AAPL), (C), (RMBS); Jon Najarian Owns (TIE) Calls; Jon Najarian Owns (BRCM) Call Spread; Jon Najarian Owns (LEH) Put Spreads, (STI) Put Spreads; Terranova Owns (YHOO), (AAPL), (RIMM), (SA), (VLO), (EOG), (NOV), (POT), (X), (KOL), (GS), (FCX); Terranova Owns (AIG) Puts

Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)

Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

GE Is The Parent Company Of CNBC; NBC Universal Is The Parent Company Of CNBC

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  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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