You can thank us later…maybe. Back on February 6th (eight trading sessions ago) we were touting the strength of the S&P Small Cap Tobacco Index. The group was up in a major way for the week, as well as over the the two week period at the time. Since then, it’s remained at the top of the two-week leader board, gaining 8.6% since February 6th.

That strength was the whole point of the exercise… to find groups and individual stocks that are so strong that they could overcome general market weakness if need be. That emerging relative strength is often long-lived, so there’s a good shot at finding great trading ideas. And, the exercise worked successfully this time; the market slipped, but the tobacco index continued to make gains.

Though some of the stocks we mentioned at the time were indeed the reason for the rally since then, not all of them were. Likewise, we didn’t mention the one small cap tobacco stock that’s been one of the most impressive performers of late… Alliance One International, Inc. (AOI). We definitely should have discussed it though.

AOI shares are up by pretty much the same amount as the small cap tobacco index itself, which leads us to think the index has a healthy dose of Alliance One International as a constituent. We can’t say for sure, as Standard & Poor’s isn’t overly-forthcoming about how they construct many of their specialty indices. However, both the AOI and the S&P Small Cap Tobacco Index charts and results are amazingly similar. If not completely, they may essentially be the same thing.

Those are academic details at this point though. The intent was to drill-down into sectors, industries, and market caps to fish out the best of the best. Alliance One International is that stock in this group.

What’s really interesting about Alliance One is not so much the chart and the opportunity, but how it can be so far off the radar despite being an official ‘S&P 600′ holding. It’s not the smallest company in the ‘tobacco’ industry, yet it doesn’t show up on most of the web’s online search-and-screen tools. In fact, many bulletin board companies (and even a few pink sheet stocks) showed up as tobacco stocks in places where AOI didn’t. Analyst coverage is nil too.

The lesson learned is simply to not assume all stocks are being served up or followed by the reputable market information sources. We could have easily overlooked Alliance One International had we not been persistent, and continued to watch those emerging industry trends we discussed on the 6th.

As it turns out, the persistence paid off… AOI is literally one of the top performers - for any group or market cap - over the last four weeks, having gained 30.71% during that period.

Regarding the potential longevity, all we can say is this… we’ve now seen AOI make higher highs and higher lows made while the market was making lower highs and lower lows. The stock has also broken above a fairly important resistance line at $3.12. Plus, we’re seeing a bullish upside-down head-and-shoulders pattern take shape on the chart. All are bullish hints.

Factor in that the stock is trading at about half the value it was in June of last year, and that the P/E is 8.0, and what you have a very under-followed stock that looks very interesting. It’s not an official ‘trade’ for us yet, but it could be soon.

If you want to be informed about other undiscovered values like Alliance One International, Inc. (NYSE:AOI), the free newsletter can do that for you. Delivered one to two times per week, the newsletter keeps you in touch with great stocks most of the media will never even discuss until well after the big gains are made. Don’t stay behind the eight ball any longer. Sign up today.