These six stocks have positive catalysts for future growth, greater than 20% EPS quarterly growth rates and profit margins greater than or equal to 50% over the trailing 12 months. These are bullish indicators regarding a stock's possible future performance. Moreover, most of these stocks are trading well below consensus analysts’ estimates, several have recent upgrades and positive analyst comments.
Nonetheless, this is only the first step in finding winners for your portfolio. Now that we have cut the wheat from the chaff, let's take a closer look to distinguish the driving factors behind these remarkable statistics and ensure the stories are intact.
Below is a detailed table with statistics regarding these stocks' summary information followed by a brief review of each company, a summary of current analysts' estimates and up/downgrade activity followed by a chart of the company's key statistics.
Cirrus Logic, Inc. (NASDAQ:CRUS) develops high-precision analog and mixed-signal integrated circuits (ICs). The company offers analog and mixed-signal audio converter and audio digital signal processor (DSP) products, which include analog-to-digital converters (ADCs); digital-to-analog converters (DACs); chips for integrating ADCs and DACs into an IC; digital interface ICs; volume controls; and digital amplifiers, as well as audio DSPs for consumer electronics applications, such as A/V receivers, digital TVs and CobraNet ICs and modules for networked audio applications.
With the introduction of the CS1501/CS1601, Cirrus Logic continues to expand its line of digital power factor correction (PFC) ICs and sharpen its focus on new digital energy control-related products. Much like the CS1500/CS1600, which were introduced in 2010, these new digital PFC devices compete head-to-head with legacy analog PFC controllers by offering superior performance and allowing for simpler and smaller system designs.
The company is trading significantly below analysts' estimates. CRUS has a median price target of $24 by 3 brokers and a high target of $33. The last up/downgrade activity was on Aug 19, 2010, when Stifel Nicolaus downgraded the company from Buy to Hold.
Liberty Capital Group (LCAPA) engages in the live-action theatrical film production and distribution, home video distribution, live-action television production and distribution and theatrical and non-theatrical animation businesses primarily in the United States.
Liberty recently announced it has received approval from its stockholders to split-off the businesses, assets and liabilities currently attributed to its Liberty Capital and Liberty Starz tracking stock groups. As previously announced, the Delaware Court of Chancery ruled in Liberty's favor in its case against the Bank of New York that the Split-Off will not constitute a disposition of all or substantially all the assets of Liberty Media, LLC under the indenture governing its public indebtedness. A final decree implementing the ruling was entered on May 9th. The judgment is subject to appeal, which must be lodged within 30 days from the entry of the final decree. If an appeal is filed, Liberty will request expedition of the appeal.
The company is trading significantly below analysts' estimates. LCAPA has a median price target of $95 by 11 brokers and a high target of $110.14. The last up/downgrade activity was on Oct 26, 2010, when Deutsche Bank downgraded the company from Buy to Hold.
Main Street Capital Corporation (NYSE:MAIN) is a business development company specializing in equity, equity related and debt investments in small and lower middle market companies.
Main Street Capital recently announced the expansion of total commitments under its three-year credit facility (the "Credit Facility") from $100 million to $155 million. The $55 million increase in total commitments included commitment increases by all six lenders currently participating in the Credit Facility. In addition to the $55 million increase in total commitments, Main Street extended the maturity of the Credit Facility by one year to September 2014. The amended Credit Facility also contains an accordion feature that allows for a further increase in total commitments under the facility to $200 million on the same terms and conditions as the existing lender commitments.
The company is trading significantly below analysts' estimates. MAIN has a median price target of $19.25 by 4 brokers and a high target of $21. The last up/downgrade activity was on May 9, 2011, when Ladenburg Thalmann upgraded the company from Neutral to Buy.
PennantPark Investment Corporation (NASDAQ:PNNT) is a publicly listed business development firm specializing in direct and mezzanine investments in middle market companies.
PennantPark Investment recently declared its third fiscal quarter 2011 distribution of $0.27 per share, payable on July 1, 2011 to stockholders of record as of June 20, 2011. Distributions are paid from taxable earnings and may include return of capital and/or capital gains. The specific tax characteristics of the distribution will be reported to stockholders on Form 1099 after the end of the calendar year.
The company is trading significantly below analysts' estimates. PNNT has a median price target of $14 by 12 brokers and a high target of $14. The last up/downgrade activity was on Oct 6, 2010, when JMP Securities initiated coverage on the company with a Market Outperform rating.
Silvercorp Metals Inc. (NYSE:SVM) engages in the acquisition, exploration, development and operation of silver mineral properties in China and Canada. The company holds interests in four silver, lead and zinc mines, including the Ying Project, the HPG Project, the TLP Project and the LM Project at the Ying Mining Camp in the Henan Province of China.
Silvercorp Metals Inc. recently announced it has received TSX approval for its Normal Course Issuer Bid to acquire up to 10 million common shares from June 29, 2011 to June 28, 2012, representing 5.7% of the company’s 175,047,941 common shares currently issued and outstanding. The company is taking this action because it believes that prevailing market conditions have resulted in Silvercorp's shares being undervalued relative to the immediate and long term value of Silvercorp's portfolio of producing and development properties in China and Canada.
The company is trading significantly below analysts' estimates. SVM has a median price target of $66 by 15 brokers and a high target of $77. The last up/downgrade activity was on Jan 18, 2011, when BMO Capital Markets upgraded the company from Market Perform to Outperform.
Triangle Capital Corporation (NYSE:TCAP) is a private equity and venture capital firm specializing in buyouts, change of control transactions, acquisitions, growth financing and recapitalizations in lower middle market companies.
Triangle Capital recently announced it closed an $11.8 million investment in Wythe Will Distributing, LLC ("Wythe Will") and Tzetzo Brothers, Inc. ("Tzetzo") in support of a merger of the two companies. The investment consisted of subordinated debt and equity. Wythe Will and Tzetzo are leaders in the packaging and distribution of confectionary products and specialty foods.
The company is trading significantly below analysts' estimates. TCAP has a median price target of $20.50 by 7 brokers and a high target of $21. The last up/downgrade activity was on May 6, 2011, when Robert W. Baird upgraded the company from Neutral to Outperform.
Information was gathered from CNBC, Yahoo Finance and respective company websites. Based on the current market conditions I would suggest scaling in to any position to reduce risk. I believe all these stocks are currently undervalued and provide significant opportunities for long term investors. Please use this information as a starting point for your own due diligence.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TCAP, LCAPA, SVM, CRUS, MAIN, PNNT over the next 72 hours.