Some of the following small cap names offer tremendous growth potentials as their PEG ratios hover close to 1. As I find P/E and P/S ratios very volatile when trying to assess small cap securities, I concentrate more on ratios that encapsulate these stocks as financially sound: price-to-book, price-to-cash, return on equity, and debt-to-capital.
It is noteworthy to mention that as with most ratios, it is useful to compare them within their industries. In addition, very low price-to-book ratios could also signal that something could be fundamentally wrong with a company or there are relatively low barriers for new entrants.
| Company Name | PEG Ratio | Price/Book | Price/Cash | ROE | Debt/Capital |
| A.O. Smith Corp. (AOS) | 1.2 | 1.7 | 11.8 | 10.09% | 27.91% |
| Bank of Hawaii Corp. (BOH) | 1.5 | 1.9 | 10.4 | 16.08% | - |
| Casey's General Stores (CASY) | 1.7 | 3.9 | 9.5 | 14.90% | 60.72% |
| Lithia Motors, Inc. (LAD) | 0.5 | 1.1 | 6.9 | 9.38% | 64.42% |
| LifePoint Hospitals, Inc (LPNT) | 1.1 | 0.9 | 5.5 | 8.30% | 44.11% |
| MKS Instruments, Inc. (MKSI) | 0.4 | 1.3 | 7.4 | 17.32% | 0.06% |
| Minerals Technologies, Inc. (MTX) | 2.1 | 1.2 | 7.3 | 8.56% | 10.73% |
| 99 Cents Only Stores (NDN) | 1.3 | 1.9 | 12.8 | 11.38% | 0.07% |
| Novellus Systems, Inc. (NVLS) | 0.7 | 1.9 | 5.7 | 28.36% | 9.73% |
| Olin Corporation (OLN) | 0.4 | 1.5 | 4.9 | 23.14% | 37.11% |
| Plantronics, Inc. (PLT) | 0.9 | 2.4 | 11 | 19.44% | 0.00% |
| Portfolio Recovery Associates (PRAA) | 0.8 | 2.1 | 11 | 17.72% | 31.08% |
| Superior Industries International (SUP) | 0.1 | 1.0 | 5.1 | 13.58% | 0.00% |
| Trustmark Corporation (TRMK) | 1.4 | 1.1 | 9.5 | 9.13% | - |
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
