Best small public companies in America

The nation's economic malaise has hit small businesses hard. But not all have been equally affected. Here are publicly traded companies with impressive growth in earnings, sales and return on investmemt.

By MSN Money Partner Oct 21, 2011 12:28PM

By Kurt Badenhausen, Forbes.com 

 

For many small businesses, this economic "recovery" has felt more like a tension headache that just won't go away. Then there are the impressive outfits on Forbes' annual ranking of America's 100 best small public companies.

 

The list features companies with remarkable sales and earnings growth across a host of industries, from heath care to casual dining. Candidates must have been publicly traded for at least a year, generate annual revenue of between $5 million and $1 billion, and boast a stock price no lower than $5 a share. (For apples-to-apples comparisons, we excluded financial institutions, REITs, utilities and limited partnerships.)

 

The rankings are based on earnings growth, sales growth and return on equity in the past 12 months and over five years; dropped were thinly traded names and those with fuzzy accounting or major legal troubles.

 

Stock performance versus each company's peer group counted, too.

 

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Eleven health care companies are among the top 100, including No. 1-ranked Questcor Pharmaceuticals (QCOR). The company's main drug, Acthar, accounts for most of its $143 million in sales. Acthar was approved in 1952 and is used to fight a myriad of conditions including multiple sclerosis, respiratory diseases and rheumatic disorders. Last year the U.S. Food and Drug Administration approved Acthar to treat infantile spasms. Prescriptions for patients suffering from MS -- about $50,000 a pop -- have soared in recent months. Questcor's shares are up 229% over the past 12 months.

 

Software makers dominated the list, with 15 entries. Fifth-ranked SolarWinds (SWI) sounds like a play on green technology but the company actually designs software that helps computer networks run better. SolarWinds was co-founded by former Wal-Mart Stores (WMT) executive Donald Yonce, who still owns a 22% stake. The company's 67% average return on equity over the past five years is the best of any in the top 100.

 

Another software maker, Interactive Intelligence (ININ), at No. 8, writes code that manages everything from customer service calls to e-mail marketing campaigns, putting it head to head with giants like Avaya and Cisco Systems (CSCO).

 

Unlike other companies too skittish to add payroll, these 100 companies are hiring. During the previous three fiscal years, 84 of them boosted payroll -- by an average 48% -- adding a total of 56,885 workers. A vast majority of those came aboard during the natural course of business, not via acquisition.

 

Masimo (MASI), ranked 19th, a maker of pulse monitors that reduce false alarms, has added 1,049 jobs over the past three fiscal years, a 78% increase. The company says it has 84 open positions still to fill, mainly in sales and marketing.

 

Even in the toughest of times, the best companies -- small and large -- find a way.

 

Here's a closer look at the top five companies:

 

Company: Questcor Pharmaceuticals (QCOR)

Rank: No. 1

Industry: Biopharmaceuticals

Headquarters: Union City, Calif.

Annual sales: $143 million

Key fact: The stock is up more than 4,000% over the past four years.

 

Company: American Public Education (APEI)

Rank: No. 2

Industry: Online education

Headquarters: Charles Town, W.V.

Annual sales: $224 million

Key fact: The company caters to active members of the military and government employees, offering 87 degree programs to 96,000 adult students.

 

Company: IEC Electronics (IEC)

Rank: No. 3

Industry: Electronic components

Headquarters: Newark, N.Y.

Annual sales: $126 million

Key fact: The company installed a Web cam that allows customers see their products being assembled.

 

Company: Grand Canyon Education (LOPE)

Rank: No. 4

Industry: Online education

Headquarters: Phoenix, Ariz.

Annual sales: $404 million

Key fact: The company was founded in 1949 by the Southern Baptist church. Nearly half of its 38,600 online students are pursuing a master's degree or a doctorate.

 

Company: SolarWinds (SWI)

Rank: No. 5

Industry: Software

Headquarters: Austin, Texas

Annual sales: $171 million

Key fact: The company was founded in 1998 in Tulsa, Okla., by brothers Don and Dave Yonce. It moved to Austin in 2006 and went public in 2009.

 

Go to Forbes.com for the rest of this year's top 20.

 

And see related slide shows at Forbes.com: