Legg Mason’s Top-Performing Small Caps

CoStar Group, Inc. (NASDAQ:CSGP) was another real estate-related play, although they are not an investment firm. They provide analytic services to the commercial real estate industry both in the States and across the pond in the UK. The stock surprised analysts every quarter, with the earnings beats pushing the stock to a 65% gain on the year. While price to earnings valuations remain chaotic, CSGP’s positive earnings and revenue growth year-over-year provided a lot of reason to the boost. Billionaire Jim Simons of Renaissance saw CSGP fit to be added to his portfolio; check out his other small-cap holdings here.

Redwood Trust, Inc. (NYSE:RWT) rounds out our list of Legg Mason’s top small-cap performers, and it is a very little surprise that it is another real estate investment trust. The empirical growth of small-caps combined with the stronger real estate market has easily given this list a slant, and for good reason. While not a 100% increase in stock value like EXH, Redwood’s returns were in excess of 50%, considerably beating the S&P’s paltry 12.6% gain. We join analysts on the Street as being bullish on RWT, noting their conservative P/E and favorable dividend payout structure. Wallace Weitz has made this one of his top five picks; read on to see which other stocks comprise his list.

Disclosure: I do not own shares of any stocks mentioned in this article.