Top Russell companies.

• Author: Heffes, Ellen M.
• Position: PERFORMANCE - Ernst & Young L.L.P. - Brief article

For the top performing companies in the Russell 2000 for 2008: growth was in and debt was out.

This is a key finding of Ernst & Young's Strategic Growth Markets practice as it sought common characteristics that exist among the top performers. Among the highlights:

* Net income growth outshines net income in top performers. Overall, the companies in the Russell 2000 that outperformed the Index itself last year reported higher median net income levels as well as higher median gross profit margins than those that underperformed.

Conversely, the top 10 performing companies reported lower net income (median of -$4.2 million) than others in the Index (median of $17.4 million).

"Dropping gross margins sound an alarm bell of stagnation," says Maria Pinelli, Americas director, Strategic Growth Markets. "Big is not always beautiful--it's all about profits and strategic growth, not growth for growth's sake."

However, the top 10 performers did report vastly higher levels of net income growth than others; only the top...