The first half of 2022 is finally in the books and it could not have come sooner. Major U.S. indices logged their worst performance in over 50 years and some strategists are estimating conditions to continue to worsen before we see some light at the end of the tunnel. WTI crude oil and the U.S. dollar were the lone bright spots for the financial markets through the first half of 2022, after climbing 39.3% and 9.30% respectively. For small and micro-cap stocks, performance was not great, but it was better than the tech-heavy NASDAQ.
The “big three” U.S. stock indices saw declines greater than 15%. The Dow Jones Industrial Average finished June with a -15.9% return, the S&P 500 reported a -21.1% return and the NASDAQ struggled with -30.3% returns. The small-cap and micro-cap stock index, Russell 2000, saw returns of -23.4%. Only Bitcoin performed worse than stocks through the first and second quarters of 2022 with a collapse of nearly 60% of value.
Despite the overall market malice from the past two quarters, there were still some big winners out there for investors in the micro-cap space. Here are the top five performing micro-cap stocks through the first half of 2022:
1. Four Seasons Education (NYSE: FEDU): +1,600%
Four Seasons Education, Inc. is a Chinese education company that was founded in 2007 and is based out of Shanghai. After trading below the $1.00 level for the past many months, the education company suddenly sprang to life in June 2022, when it soared above $10.00.
Unfortunately, it is not immediately clear as to the catalyst that provided these massive gains. The last big news from the micro-cap company came in September 2021 when management announced a $15 million share repurchase program.
2. Minerva Neurosciences (NASDAQ: NERV): +340%
Minerva Neurosciences, Inc. is a Massachusetts-based biopharmaceutical company, which is focused on the research, development, and commercialization of treatments for central nervous system-focused diseases. The stock struggled for the better part of 2022 stuck trading below $1.00. However, around mid-June 2022, the stock shot up below $0.50 to over $3.50 per share.
The strong gains from the biopharma company were propelled by strong clinical results, FDA rulings, and continued progress in drug candidate development. In March 2022, the company received FDA approval for the use of Ztalmy as an oral treatment of seizures associated with cyclin-dependent kinase-like 5 deficiency disorder.
In April 2022, the company provided insight into its Type C meeting with the FDA regarding the next steps for the company’s New Drug Application for roluperidone and the treatment of schizophrenia.
3. Trevi Therapeutics (NASDAQ: TRVI): +262%
Trevi Therapeutics, Inc. is a clinical-stage biopharmaceutical company that is focused on the research, development, and commercialization of Haduvio for the treatment of serious neurological ailments. The Connecticut-based company hit a low of around $0.50 in mid-February 2022 before surging in March and April.
Like Minerva, Trevi has been extremely focused on clinical development over the past six months and the positive results are largely considered to be the catalysts behind the recent surge. In March 2022, the company provided an update on its Phase 2 CANAL trial for Haduvio in the treatment of IPF chronic cough.
In April 2022, Trevi Therapeutics unveiled a $55 million private placement, which was priced at the market. Although capital raisings are not traditionally a bullish event, Trevi’s private placement was priced at a shareholder-friendly level and gave the company much-needed capital to continue its clinical development of Haduvio.
Recently, Trevi capped off the first half by reporting strong results from its Phase 2b/3 PRISM trial of Haduvio for the treatment of prurigo nodularis. The micro-cap company reportedly met primary and secondary endpoints with a solid safety profile.
4. Nuvectis Pharma (NASDAQ: NVCT): +260%
Nuvectis Pharma, Inc. is a biopharmaceutical company, which is focused on developing precision medicines for unmet needs in oncology. The micro-cap just recently completed its Initial Public Offering (IPO) in February 2022, yet still was able to report very strong performance.
The company’s recent success stems from its NXP800 and NXP900 drug candidates and their continued development over the past several months. The NXP800 completed its dose-escalation portion of its Phase 1 clinical trial. The NXP800 is potentially a first-in-class Heat Shock Factor 1 pathway inhibitor.
The NXP900 is an Investigational New Drug, which is currently undergoing IND-enabled studies to determine its therapeutic capabilities for various cancers.
In June 2022, Nuvectis Pharma reported positive data for NXP900 in a preclinical model of Group 4 medulloblastoma, a type of brain cancer that impacts pediatric patients. The findings were presented at the SIOPE Brain Tumour Group in Hamburg, Germany in mid-June.
5. Houston American Energy (NYSE American: HUSA): +230%
Houston American Energy Corporation is engaged as an independent oil & gas company based out of Houston, Texas. The company is focused on the exploration, development, and production of natural gas, crude oil, and related energy products within the United States. The company’s primary properties are located in the Texas Permian Basin, onshore Texas and Louisiana Gulf Coast, and the country of Colombia. As of the end of 2021, the company owned interested in four gross wells.
The micro-cap stock shot up in March 2022, as the price of oil and gas began to surge due to the Russian invasion of Ukraine. The energy sector overall was the only major market sector that reported gains during the first half of 2022.
Most of Houston American Energy’s gains came from underlying macroeconomic conditions and the hefty rise in energy commodity prices. The company did announce in May 2022 an increase in interest in its Colombian project.
Disclosure: No position. Spotlight Growth has no relationships with any of the companies mentioned in this article and did not receive payment in any form for its creation. This is an opinion article and is not meant to be financial advise. We are not broker-dealers or investment professionals. Please conduct your own due diligence. For more information on our disclosures, please visit: https://spotlightgrowth.com/disclosures/