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(Editors' Note: This article covers micro-cap stocks. Please be aware of the risks associated with these stocks.)

A 30 percent bull market does not generally result in undervalued stocks.

But Q4 Systems (OTCPK:QFOR), Atlantic Coast Financial Corporation (NASDAQ:ACFC), Octagon 88 (OTCPK:OCTX), and Americas Petrogas (OTCPK:APEOF) are four small caps that have surged, yet still trade beneath analyst target prices. For investors looking to move out of large caps with the Standard & Poor's (NYSEARCA:SPY) down for 2014, there is substantial upside to these small caps.

Q4 Systems is an information technology company that is up more than 540 percent the last 52 weeks, according to Yahoo Finance. With proven products such as the QHIX private health insurance exchange and QHIX public health insurance exchange, its revenues are increasing at a quarterly rate of 40 percent. It posted a gross profit of $6.38 million, on a trailing twelve month basis. Its client base includes blue chip firms such as Alcoa (NYSE:AA), Wal-Mart (NYSE:WMT), and Walgreen (WAG). Just under $.80 a share, the most recent analyst report for Q4 Systems was from SeeThru Equities with a target price of $5.25.

Headquartered in Jacksonville, Florida, Atlantic Coast Financial Corporation soared 76.80 percent for the last year. Its earnings-per-share growth is on a very bullish trend: up 44.80 percent for the quarter, 35.40 for the year, and projected to be 107.30 percent for the next year. Even with the price rise, there has been heavy insider buying at Atlantic Coast Financial Corporation. Now around $4.40 a share, FBR Capital just initiated coverage last month with a target price of $5.

While major oil stocks like ConocoPhillips (NYSE:COP) are off for the new year, the action in small cap Octagon 88 and Americas Petrogas has been bullish.

BP PLC (NYSE:BP) recently issued the "BP Energy Outlook" which projected a 41 percent increase in energy demand from 2012 to 2035. Oil and natural gas are predicted to be two of the leading suppliers for this increasing need. The holdings of Octagon 88 and Americas Petrogas situate each to profit from that trend.

More than 90 percent of the demand is expected to come from emerging market nations. Based in Canada, Americas Petrogas has very lucrative holdings in Argentina. Both production and revenues are up for the company. The one year analyst target price for Americas Petrogas is $4.15 with the stock presently under $1.60 a share. Americas Petrogas is up about 50 percent over the last quarter.

With holdings in Canada, Octagon 88 should benefit from the increasing appeal of North American energy assets. Over the last 52 weeks, the stock price is up nearly 90 percent. There is even interest from Chinese investors, who have been gobbling up billions in energy assets in Canada. Ernst Schlotter of SISM Research set a target price of $23.11 last May for Octagon 88.

When asked about his favorite investment in an interview in Fortune magazine, Warren Buffett named a small cap, Sees Candies, remarking that, "It's one thing to own stock in a Coca-Cola or something, but when you're actually in the business of making determinations about opening stores and pricing decisions, you learn from it. We have made a lot more money out of See's than shows from the earnings of See's, just by the fact that it's educated me."

That is the opportunity investors have with Q4 Systems, Atlantic Coast Financial Corporation, Octagon 88, and Americas Petorgas. There are certainly risks that the price of oil could collapse, tampering the demand for energy assets. The economic recovery in Northern Florida could stagnate, hindering the growth of Atlantic Coast Corporation and the quality of its loan portfolio. Operating in the high tech sector, Q4 Systems could always encounter a new development that results in products and services from competitors being superior.

But, as Buffett noted, much can be learned from these companies due to the scale of operations. That size factor also allows for investors to easily see the growth potential of these publicly traded companies, as detailed by the analyst community. Based on the analyst ratings, the profits could be substantial, too.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.