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In this market marked by slow growth and decreasing worldwide demand, finding companies that are growing revenues and earnings at a solid clip trading at reasonable valuations is paramount to constructing a portfolio that will outperform the overall market. One small cap growth stock I came across recently that has an interesting profile is RigNet (NASDAQ:RNET). It is relatively unfollowed as it IPO'd just in 2010 but has good growth prospects.

RigNet, Inc. provides remote communications services for the oil and gas industry. It offers remote communications services enabling drilling contractors, oil companies, and oilfield service companies to communicate.

7 reasons RNET is a good growth play at under $18 a share:

  1. Oppenheimer just raised its price target from $21 to $26 a share citing the company's robust growth prospects.
  2. Earnings are marching up crisply. The company made 57 cents a share in FY2011 but is tracking to a profit of 77 cents a share in FY2012. Analysts currently project almost a $1 in EPS in FY2013.
  3. Revenue growth should be north of 20% for FY2012 and the stock sports a five year projected PEG of under 1 (.86).
  4. The company landed some significant new work in Brazil and Qatar in October.
  5. The stock sells at 17x forward earnings, a discount to its historical average (27.0).
  6. The median price target on the shares by the 4 analysts that cover the stock is $24 a share, a third higher than the current stock priced.
  7. Given its unique niche, fast growth and small market cap (under $300mm), I could easily see one of the bigger oil services firms as a buyer of the firm to fill out their product line.
Source: RigNet: Fast Growing Energy 'Tech' Firm Has Price Target Raised At Oppenheimer