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One way to gauge the profitability of a company is by comparing its profit margins to industry averages – companies with higher profit margins are taking a greater percentage of revenues as profits and have greater control over their cost structure.

We ran a screen on small-cap stocks for those that are highly profitable, beating their industry peers on gross, operating, and pretax margins.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research
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We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



Do you think these companies have strong operations? Use this list as a starting-off point for your own analysis.

List sorted by market cap.

1. Hercules Technology Growth Capital, Inc. (NYSE:HTGC): A private equity, venture capital, and venture debt firm specializing in providing debt and equity to privately held venture capital and private equity backed companies and select publicly-traded companies. Market cap of $383.34M. TTM gross margin at 79.29% vs. industry gross margin at 46.24%. TTM operating margin at 68.24% vs. industry operating margin at 35.57%. TTM pretax margin at 36.97% vs. industry pretax margin at 36.13%. The stock is a short squeeze candidate, with a short float at 5.33% (equivalent to 8.24 days of average volume). It's been a rough couple of days for the stock, losing 5.51% over the last week.

2. OYO Geospace Corp. (OYOG):
Engages in designing and manufacturing instruments and equipments used in the acquisition and processing of seismic data; and in the characterization and monitoring of producing oil and gas reservoirs. Market cap of $381.38M. TTM gross margin at 46.93% vs. industry gross margin at 34.85%. TTM operating margin at 25.97% vs. industry operating margin at 17.90%. TTM pretax margin at 26.04% vs. industry pretax margin at 16.38%. It's been a rough couple of days for the stock, losing 9.19% over the last week.

3. Mercury Computer Systems, Inc. (NASDAQ:MRCY): Designs, manufactures, and markets high-performance embedded, real-time digital signal and image processing systems and software for embedded, and other specialized commercial and defense computing markets. Market cap of $380.34M. TTM gross margin at 59.58% vs. industry gross margin at 36.37%. TTM operating margin at 11.17% vs. industry operating margin at 9.50%. TTM pretax margin at 11.62% vs. industry pretax margin at 10.49%. It's been a rough couple of days for the stock, losing 5.93% over the last week.

4. Measurement Specialties Inc. (NASDAQ:MEAS): Engages in the design, development, and manufacture of sensors and sensor-based systems for original equipment manufacturers and end users. Market cap of $379.71M. TTM gross margin at 46.65% vs. industry gross margin at 36.37%. TTM operating margin at 13.44% vs. industry operating margin at 9.50%. TTM pretax margin at 12.21% vs. industry pretax margin at 10.49%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.28). The stock is a short squeeze candidate, with a short float at 7.2% (equivalent to 12.19 days of average volume). It's been a rough couple of days for the stock, losing 9.7% over the last week.

5. Continucare Corp. (NYSE:CNU): Provides primary care physician services on an outpatient basis in the United States. Market cap of $379.03M. TTM gross margin at 24.73% vs. industry gross margin at 21.13%. TTM operating margin at 11.97% vs. industry operating margin at 8.53%. TTM pretax margin at 11.28% vs. industry pretax margin at 7.03%. The stock has gained 60.57% over the last year.

6. STR Holdings, Inc. (NYSE:STRI):
Engages in the manufacture and sale of encapsulants to the solar module industry. Market cap of $375.76M. TTM gross margin at 43.01% vs. industry gross margin at 37.45%. TTM operating margin at 20.96% vs. industry operating margin at 17.70%. TTM pretax margin at 17.96% vs. industry pretax margin at 16.68%. The stock is a short squeeze candidate, with a short float at 23.53% (equivalent to 17.73 days of average volume). It's been a rough couple of days for the stock, losing 12.64% over the last week.

7. Cascade Corp. (NYSE:CASC): Manufactures loading devices and replacement parts primarily for the lift-truck and construction industry. Market cap of $373.95M. TTM gross margin at 32.90% vs. industry gross margin at 32.18%. TTM operating margin at 14.21% vs. industry operating margin at 12.34%. TTM pretax margin at 13.40% vs. industry pretax margin at 10.66%. The stock is currently stuck in a downtrend, trading 10.36% below its SMA20, 21.92% below its SMA50, and 26.21% below its SMA200. It's been a rough couple of days for the stock, losing 5.57% over the last week.

8. Tompkins Financial Corporation. (NYSEMKT:TMP): Provides banking and financial services to individuals, corporations, and other business clients in New York. Market cap of $368.33M. TTM gross margin at 80.60% vs. industry gross margin at 71.23%. TTM operating margin at 40.53% vs. industry operating margin at 39.27%. TTM pretax margin at 27.15% vs. industry pretax margin at 22.37%. The stock is a short squeeze candidate, with a short float at 6.93% (equivalent to 27.67 days of average volume). It's been a rough couple of days for the stock, losing 6.31% over the last week.

9. Community Trust Bancorp Inc. (NASDAQ:CTBI): Operates as the holding company for Community Trust Bank, Inc. Market cap of $354.66M. TTM gross margin at 76.75% vs. industry gross margin at 71.23%. TTM operating margin at 44.63% vs. industry operating margin at 39.27%. TTM pretax margin at 25.49% vs. industry pretax margin at 22.37%. The stock is currently stuck in a downtrend, trading 5.23% below its SMA20, 9.67% below its SMA50, and 14.01% below its SMA200. It's been a rough couple of days for the stock, losing 6.66% over the last week.

10. Astronics Corp. (NASDAQ:ATRO):
Designs and manufactures products for the aerospace and defense industries worldwide. Market cap of $354.04M. TTM gross margin at 27.81% vs. industry gross margin at 26.29%. TTM operating margin at 13.68% vs. industry operating margin at 12.16%. TTM pretax margin at 12.60% vs. industry pretax margin at 7.91%. The stock has had a good month, gaining 19.28%.

11. Healthways Inc. (NASDAQ:HWAY):
Provides specialized, comprehensive solutions to assist people in maintaining or improving their health and well-being. Market cap of $352.16M. TTM gross margin at 27.35% vs. industry gross margin at 21.13%. TTM operating margin at 9.11% vs. industry operating margin at 8.43%. TTM pretax margin at 8.95% vs. industry pretax margin at 6.93%. The stock is a short squeeze candidate, with a short float at 7.79% (equivalent to 10.82 days of average volume). It's been a rough couple of days for the stock, losing 11.44% over the last week.

12. FPIC Insurance Group Inc. (NASDAQ:FPIC):
Operates as an insurance carrier in the medical professional liability insurance sector of the property and casualty insurance industry in Florida. Market cap of $351.12M. TTM gross margin at 25.21% vs. industry gross margin at 16.96%. TTM operating margin at 25.21% vs. industry operating margin at 13.61%. TTM pretax margin at 22.06% vs. industry pretax margin at 12.24%. The stock has gained 26.63% over the last year.

13. First Financial Corp. (NASDAQ:THFF):
Provides various financial services. Market cap of $350.18M. TTM gross margin at 81.64% vs. industry gross margin at 71.23%. TTM operating margin at 42.48% vs. industry operating margin at 39.27%. TTM pretax margin at 30.38% vs. industry pretax margin at 22.37%. It's been a rough couple of days for the stock, losing 7.15% over the last week.

14. Epoch Investment Partners, Inc. (NASDAQ:EPHC):
A publicly owned investment manager. Market cap of $343.01M. TTM gross margin at 56.30% vs. industry gross margin at 46.24%. TTM operating margin at 40.73% vs. industry operating margin at 35.57%. TTM pretax margin at 41.72% vs. industry pretax margin at 36.13%. The stock has had a good month, gaining 15.94%.

15. Orbotech Ltd. (NASDAQ:ORBK):
Engages in the design, development, manufacture, marketing, and service of yield-enhancing and production solutions for specialized applications in the supply chain of the electronics industry. Market cap of $335.85M. TTM gross margin at 40.45% vs. industry gross margin at 36.37%. TTM operating margin at 12.32% vs. industry operating margin at 9.50%. TTM pretax margin at 11.15% vs. industry pretax margin at 10.49%. It's been a rough couple of days for the stock, losing 5.1% over the last week.

16. Electro Rent Corp. (NASDAQ:ELRC):
Engages in the rental, lease, and sale of new and used electronic test and measurement equipment. Market cap of $318.21M. TTM gross margin at 62.12% vs. industry gross margin at 36.37%. TTM operating margin at 16.06% vs. industry operating margin at 9.50%. TTM pretax margin at 16.30% vs. industry pretax margin at 10.49%. The stock has performed poorly over the last month, losing 10.16%.

17. USA Mobility, Inc. (NASDAQ:USMO):
Provides wireless communications solutions to the healthcare, government, enterprise, and emergency response sectors in the United States. Market cap of $304.98M. TTM gross margin at 67.53% vs. industry gross margin at 60.24%. TTM operating margin at 28.45% vs. industry operating margin at 21.19%. TTM pretax margin at 28.47% vs. industry pretax margin at 14.98%. The stock is a short squeeze candidate, with a short float at 8.92% (equivalent to 9.95 days of average volume). It's been a rough couple of days for the stock, losing 8.55% over the last week.

18. AFC Enterprises Inc. (AFCE):
Develops, operates, and franchises quick-service restaurants under the trade names of Popeyes Chicken & Biscuits and Popeyes Louisiana Kitchen. Market cap of $301.46M. TTM gross margin at 70.61% vs. industry gross margin at 37.26%. TTM operating margin at 27.19% vs. industry operating margin at 19.26%. TTM pretax margin at 23.54% vs. industry pretax margin at 17.80%. The stock has gained 3.17% over the last year.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 18 Small-Cap Stocks With Impressive Profitability