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Businesses are always looking to have the best networking servers and components to help bolster productivity and efficiency. While there are certainly a lot of names in this space, Silicom Ltd (NASDAQ: SILC) is certainly one that stands out from the crowd. The small-cap company was originally founded in 1987 in Israel and has since spread its influence around the world. For instance, while the company has received praise for its powerful servers that do not bust the bank, the company recently announced its new patented service called SETAC, which is a Server to Appliance Converter. This allows standard servers to be convertible with hardware. This is a newer idea from recent years that is starting to take hold with businesses and it will certainly help the stock over the life of the patent. Additionally, the company rolled out its new line of Intelligent Nano-Second Time Stamping or NICS, which is considered to be a next-generation networking tool for big businesses that use lots of data. This will certainly help revenues and the overall share price in the many years to come.

Now that you have an idea of its front running product line, let's look at the fundamentals. The company has a market cap of $196.07 million and currently has a conservative buy rating from analysts at two firms. The stock currently has a price to earnings of 5.78 and forward price to earnings of 16.85. The company is trading at a very large discount to its earnings growth or PEG of 0.39. Additionally, with a price to book of 0.74, the stock is also trading at a discount to its book value. Price to cash comes in at a healthy 2.03, as well. The company has no debt and sports a hefty cash load of $13.75 cash per share. This gives the company a very stable financial situation as we can see with a current ratio at 6.21. Earnings per share are expected to rise 43 percent this year with the upward earnings trend to continue for years to follow. The company's fantastic product line and sales figures can be seen in the margin figures. Silicom has a gross margin of 42 percent, operating margin of 21.6 percent and a profit margin of 21.43 percent. This is very significant and shows that the stock is a rather conservative investment. Analysts also give the stock a full-year price target of $32.

The bottom line here is that Silicom may be a smaller company than some of the larger networking giants such as Cisco Systems (NASDAQ: CSCO), but the growth and next generation products gives Silicom the advantage. The stock has been in a nice uptrend that originated in mid-September of last year and it shows no sign of slowing down. Be aware that the company could see a tumble once the NASDAQ starts to decline and/or if Europe slips back into a recession. Other than that Silicom is a long-term winner.

Source: International Superior Networking Firm Looks To Continue Trend