SolarWinds Tops List Of America’s Best Small Companies
The U.S. economy is plodding along in its recovery from the recession that stretched from December 2007 to June 2009. The annual GDP growth rate has been a pitiful 0.5% on average during the past five years, but it is not all bleak. There are companies from aerospace to health care to steel that are booming. Forbes’ annual ranking of America’s Best Small Companies highlights those companies that have experienced strong growth over the past five years.
Topping this year’s list is the software outfit SolarWinds. The Austin, Texas-based company is one of eight software firms that made the final cut. Internet data traffic is expected to triple over the next five years, according to Cisco Systems. Despite its green energy name, SolarWinds is in the middle of the trend. Led by CEO Kevin Thompson, the company offers IT departments affordable software to monitor networks and servers.
Aiming for 80% of the functionality of rival offerings from IBM and Hewlett-Packard, the company sells its wares for one-tenth as much. Such savings have fueled annual sales growth of 38% since 2006. Donald C. Yonce, a partner at Mobility Ventures and a former Wal-Mart executive, co-founded the company in 1999 and served on the board until 2010. His 15% stake is worth $640 million, thanks to a 140% jump in the stock over the past year.
The Forbes list highlights public companies with sales under $1 billion, which are ranked based on return on equity, sales growth and earnings growth over the past year and the past five years. Forbes also factored in stock performance versus each company’s peer group during the last 12 months.