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Summary

  • All of the companies in this article have strong current quarter growth.
  • All of the companies in this article made positive forward comments.
  • All of the companies in this article appear undervalued to me based on recent results and a growth P/E of 15-20.

#1 Issuer Direct Corporation (NYSEMKT:ISDR)

What They Do - A market leader and innovator of disclosure management solutions and cloud-based compliance technologies.

Earnings - Revenues increased 111% year-over-year reaching $3.6 million for the second quarter of 2014. Non-GAAP earnings per share increased to $0.24 compared to $0.21 in the same period of 2013

Forward Comments - Brian Balbirnie, CEO of Issuer Direct, commented, "For most of the last year we have focused on the integration of the combined entities of PrecisionIR and Issuer Direct. That phase is now behind us, and we are focused on expanding our newly integrated business through organic growth. We have reorganized our sales organization to take maximum advantage of the talents of our two organizations and we intend to invest and expand our internal sales force and our channel partner network."

Valuation - Based upon recent results and forward comments, ISDR appears to be on an annual run rate of EPS for $1+. If they were to have a P/E ratio of 15-20 for a growth stock, that would mean a stock price of $15-$20. ISDR closed at $10.97 on Friday. ISDR only has approximately 2 million shares outstanding and a trading float of approximately 1 million shares.

#2 Willdan Group, Inc. (NASDAQ:WLDN)

What They Do - Willdan provides outsourced professional technical and consulting services to public agencies, public and private utilities, and commercial and industrial firms throughout the United States. Willdan benefits from well-established relationships, industry-leading expertise and a solid reputation for delivering projects on time and on budget.

Earnings - Total contract revenue for the second quarter of 2014 increased 31.6% to $27.0 million from $20.5 million for the second quarter of 2013. EPS was $0.25 per diluted share in the second quarter of 2014 compared to $0.09 in the second quarter of 2013.

Forward Comments - Willdan's Chief Executive Officer Tom Brisbin said "Our outlook is for continued profitable growth supported by our expanded service offering, geographic reach and a better economic environment," he added. "We are winning new contracts and increasing our services with existing customers based on the quality of our work and program management capabilities. We also see opportunities to grow our business through tuck-in acquisitions and have a strong balance sheet to capitalize on this strategy."

Valuation - Based upon recent results and forward comments, WLDN appears to be on an annual run rate of EPS for $1+. If they were to have a P/E ratio of 15-20 for a growth stock, that would mean a stock price of $15-$20. WLDN closed at $10.48 on Friday. WLDN has approximately 7.5 million shares outstanding and a trading float of approximately 6 million shares.

#3 Diversicare Healthcare Services, Inc. (NASDAQ:DVCR)

What They Do - A premier provider of long-term care services

Earnings - Net revenue increased 33.9% to $82.3 million in the second quarter of 2014 from $61.5 million in the second quarter of 2013, primarily due to 11 nursing centers acquired during 2013 and 2014. Adjusted EBITDA increased to $4.6 million in the second quarter of 2014 compared to $(0.5) million in 2013. EPS was $0.14 compared to a loss of ($0.43) in the same quarter last year.

Forward Comments - Kelly Gill, Diversicare's CEO, stated, We enter the second half of 2014 with tremendous momentum and a positive financial outlook, all while continuing to improve the quality of care being delivered to our residents."

Valuation - Tenet Healthcare Corp. (NYSE:THC) is in the same industry as DVCR and trades at an Enterprise Value/EBITDA (ttm) of 11. If the $4.6 million of adjusted EBITDA this quarter is extrapolated for a year multiplied by 11 and divided by DVCR 6.2 million shares outstanding that would be a stock price of $32.65. DVCR closed at $9.12 on Friday. The trading float is approximately 3.4 million shares.

#4 Allied Motion Technologies Inc. (NASDAQ:AMOT)

What They Do - Allied Motion designs, manufactures and sells motion control products into applications that serve many industry sectors. Allied Motion is a leading supplier of precision and specialty motion control components and systems to a broad spectrum of customers throughout the world.

Earnings - Net income increased 229% to $2,693,000 or $0.29 per diluted share for the quarter ended June 30, 2014 compared to $819,000 or $0.09 per diluted share for the quarter ended June 30, 2013. Revenues for the quarter increased 145% to $62,069,000 compared to $25,352,000 last year with sales to U.S. customers up 191% and foreign sales up 91%.

Forward Comments - Commenting on the results, Dick Warzala, Chairman and CEO of Allied Motion, stated, "I am extremely pleased to announce our second quarter results which are a direct reflection of our strategic plans and operating initiatives coming to fruition. The second quarter marks our third consecutive quarter of strong EBITDA growth since the culmination of our restructuring in the third quarter of 2013. I believe this continuation of the results from the previous two quarters is indicative of the sustainable path established through our completed strategic investments and repositioning of the company." We enter the second half of 2014 with tremendous momentum and a positive financial outlook, all while continuing to improve the quality of care being delivered to our residents."

Valuation - Based upon recent results and forward comments, AMOT appears to be on an annual run rate of EPS for $1-$1.20. If they were to have a P/E ratio of 15-20 for a growth stock, that would mean a stock price of $15-$24. AMOT closed at $14.64 on Friday. AMOT has approximately 9.2 million shares outstanding and a trading float of approximately 5.2 million shares.

Disclaimer: I am long ISDR WLDN DVCR AMOT. This is not investment advice. The valuation section does not represent price target predictions whatsoever. The stocks in this article may never appreciate in price. Do not make investment decisions based on this article. This article is for information only. I am not an investment advisor. I am not responsible for your investment decisions. Please see disclaimers at the bottom of the blog. I may sell my position in ISDR WLDN DVCR AMOT at any time. Low float stocks can be risky and you could lose all of your investment.

I released this article at 8:15 am EST Monday August 18, 2014 on my blog at super-trades.com and to my subscription newsletter service on profit.ly at 8:15 am EST Monday August 18, 2014.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Source: The Best Small Cap Earnings Reports Of This Quarter