By Dan Beighley
Orange County Business Journal
Nearly a dozen Orange County companies have been added to the Russell 2000 index of smaller stocks since June as the barrier to entry came down.
For many, being part of the index popular with some investors and analysts can lead to greater visibility, giving them a better shot at raising money from investors.
Five of the 11 local stocks added to the index this year are in healthcare, an industry that has held up better than others during the recession.
The common thread among all is that they met the $78 million market value threshold, which was more than halved from last year’s $167 million cutoff.
The threshold is the lowest in 16 years, a sign of the damage inflicted on companies from last fall’s Wall Street meltdown and subsequent dip this spring, according to Maria Pinelli, Americas director of strategic growth markets for New York-based Ernst & Young LLP.
The Russell 2000 is made up of about 2,000 smaller stocks and is run by Tacoma, Wash.-based Russell Investment Group, part of Milwaukee-based Northwestern Mutual Life Insurance Co.
The index is readjusted every June.
As of Aug. 31, the average market value of a Russell 2000 company was $860 million. The largest in the group is $2.7 billion.
The 11 local newcomers bring the Orange County contingent of the Russell 2000 to about 30 companies. Earlier members include Costa Mesa-based Emulex Corp., Huntington Beach-based Quiksilver Inc., Anaheim-based Pacific Sunwear of California Inc. and Santa Ana-based Corinthian Colleges Inc.
The newcomers are looking to take advantage of their new status.