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In times of a weak or sluggish global economy if investors can't get the strong growth they seek then sound profitability is often the next best thing to search out. After all, what is left for investors at the end of the day relative to the bottom line is often one of the strongest long-term price drivers in our view. This is why we decided to find small-cap companies that have been able to generate strong profitability and build up cash over time to the benefit of shareholders.

The Current ratio is a liquidity ratio used to determine a company’s financial health. The metric illustrates how easily a company can pay back all its short obligations all at once through current assets should they all come due at once. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn’t mean the company will go bankrupt but it also doesn’t bode well for the company and may indicate that it could have an issue paying back upcoming obligations.

The Net Margin is a profitability metric that illustrates, by percentage, how every dollar earned gets turned into a bottom-line profit. This is just one of many profitability metrics used by investors and analysts to get a better picture of what the company is being left with at the end of the day. Generally, a company that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability.

We first looked for small-cap stocks with strong profitability (Net Margin (TTM) >10%). From this narrowed list of candidates we then looked for companies that have strong liquidity (Current Ratio>2). We did not screen out any sectors.

The list is ranked from highest to lowest by the Net Margin (TTM):

1. Capital Product Partners L.P. (CPLP)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$477M

Beta

1.24

The company a shipping company, provides seaborne transportation of refined oil products and chemicals. The company has a net margin (TTM) of 76.69% and a current ratio of 1.22. The short interest was 1.30% as of 10/14/2011.

2. Momenta Pharmaceuticals, Inc. (MNTA)

Sector

Healthcare

Industry

Biotechnology

Market Cap

$738M

Beta

1.41

The company specializes in the characterization and process engineering of complex molecules. MNTA has a net margin (TTM) of 68.72% and a current ratio of 25.80. The short interest was 10.90% as of 10/14/2011.

3. Giant Interactive Group, Inc. (GA)

Sector

Industrials

Industry

Business Services

Market Cap

$916M

Beta

1.01

The company develops and operates online games in the People's Republic of China. GA has a net margin (TTM) of 62.03% and a current ratio of 7.20. The short interest was N/A as of 10/14/2011.

4. Getty Realty Corporation. (GTY)

Sector

Real Estate

Industry

REIT - Retail

Market Cap

$489M

Beta

1.13

The operates as a real estate investment trust (REIT) in the United States. GTY has a net margin (TTM) of 53.83% and a current ratio of 1.41. The short interest was 8.20% as of 10/14/2011.

5. Neurocrine Biosciences, Inc. (NBIX)

Sector

Healthcare

Industry

Biotechnology

Market Cap

$402M

Beta

0.40

The company engages in the discovery, development, and commercialization of drugs for the treatment of neurological and endocrine-related diseases and disorders in the United States. NBIX has a net margin (TTM) of 48.43% and a current ratio of 2.81. The short interest was 5.20% as of 10/14/2011.

6. Diana Shipping, Inc. (DSX)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$671M

Beta

1.62

The Company is engaged in the ocean transportation of dry bulk cargoes worldwide through the ownership and operation of bulk carrier vessels. The company has a net margin (TTM) of 45.49% and a current ratio of 12.48. The short interest was 1.90% as of 10/14/2011.

7. Navios Maritime Partners L.P. (NMM)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$909M

Beta

1.29

The company owns and operates dry cargo vessels internationally. MM has a net margin (TTM) of 36.36% and a current ratio of 1.19 . The short interest was 4.00% as of 10/14/2011.

8. CNinsure, Inc. (CISG)

Sector

Financial Svs

Industry

Insurance Brokers

Market Cap

$347M

Beta

1.51

The company is an insurance intermediary company, provides insurance brokerage and agency, and insurance claims adjusting services in the People's Republic of China. CISG has as a net margin (TTM) of 34.96% and a current ratio of 11.28. The short interest was N/A as of 10/14/2011.

9. Knightsbridge Tankers, Ltd. (VLCCF)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$409M

Beta

1.06

The company engages in the seaborne transportation of crude oil and dry bulk cargoes worldwide. VLCCF has a net margin (TTM) of 33.81% and a current ratio of 5.60. The short interest was 9.50% as of 10/14/2011.

10. AutoNavi Holdings Ltd. (AMAP)

Sector

Technology

Industry

Software - Application

Market Cap

$595M

Beta

N/A

The company provides digital map content and navigation and location-based solutions in the People's Republic of China. AMAP has a net margin (TTM) of 30.56% and a current ratio of 5.70. The short interest was N/A as of 10/14/2011.

We hope this list helps as investors do their own due diligence on companies with strong profitability and liquidity levels.

*The company profiles have been sourced from Finviz.

Source: 10 Small-Cap Stocks With Strong Profitability And Plenty Of Cash On Hand