All-star stocks: Indiana small caps sizzle in 2003.

• Author: McKimmie, Kathy
• Position: Investments

THROUGH OCTOBER, THE stock performance of more than a dozen Indiana stocks, measured by percentage growth, was remarkable. Indianapolis-based Brightpoint topped the list with a 716 percent increase.

Some companies had fallen so low in their prices, though, that even with these big jumps in price they are still not back to pre-recession prices. "It'll be awhile before all investors get even on their investments," says Mark Patton, president, Patton Investment Management, Indianapolis.

There's a common theme in the list, says Jim Kocon, principal and treasurer for Peerson and Co., Whiting. With the exception of Cummins, they're all "small caps," where the total capitalization--the outstanding shares times the price per share--is less than $1 billion. "Usually, at the beginning of a bull market, small caps do better." Unlike large companies with more shares outstanding, it doesn't take many people buying a small cap's stock to increase the price, he says, so it can move quickly.

The turnaround at Brightpoint, Indianapolis, has been "absolutely phenomenal," says Gene Tanner, vice chairman, NatCity Investments. The worldwide cell-phone distributor "re-did its debt last year and its performance has been excellent." Earlier this year, the company settled a shareholder lawsuit and issued two 3-for-2 common stock splits, more than doubling its outstanding shares. After adjusting for those splits, Brightpoint's stock was up 716 percent at the end of October.

"Brightpoint's gone through a huge cycle," says Patton, from a great run-up in the '90s to a great collapse that threatened its survival. It's reemerging with "a cleaned-up balance sheet, eliminating money-losing segments and producing operating profits consistently."

A great showing at Starcraft, Goshen--up 459 percent through October after adjusting for a split earlier this year--comes as a result of a complete rebuilding of the company, says Patton. It's no longer in van conversion, which saw a 75 percent to 80 percent drop in business, but is now a second-stage manufacturer and supplier for General Motors. Results are "driven by sales and earnings," he says, and the company is "a great story with an accessible CEO."

Coming in with the third-highest percentage gain, at 285 percent, is US 1 Industries, Gary, a stock that's so micro it's off most investment advisors' radar screens. "US 1 is an interstate trucking company operating in 48 states that signs with independent contractors," says...