Pre-Paid Legal is on Forbes 200 Best Small Companies List

November 7, 2008 by Curt Siters

Thirty years ago Pre-Paid Legal set out on a mission to provide people with easy affordable access to the legal system and has earned not only the respect of many prominent members of the Bar Association but also accolades from many investment houses and magazines. They have also landed on many lists of the the best companies. The latest is from Forbes on October 8, 2008 when the company's financials put them on their "200 Best Small Companies" list. 

Conventional wisdom would have investors flee small-cap stocks when the economy takes a tumble. Big companies are safer bets, the thinking goes.

Maybe not right now. With meltdowns at AIG (nyse: AIG - news - people ), Lehman Brothers (nyse: LEH - news - people ) and Wachovia (nyse: WB - news - people ), the S&P 500 dropped 28% over the past 12 months while gross domestic product growth slowed to a crawl. The Russell 2000, made up of smaller fish, is down 18% over the same period.

With that in mind, we identified the strongest small public outfits in a very tough time for our list of the 200 Best Small Companies in America. To qualify, companies must have sales between $5 million and $750 million and a stock price of $5 as of Sept. 29. The ranking is based on return on equity, sales growth and profit growth over the past 12 months and also over five years. We also compare a company's stock performance with that of its industry peers. The shares of the companies on our 2007 list fell 15% on average over the past year, slightly outperforming the Russell 2000. --more--