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For a look into the tech sector, here are some interesting ideas to get you started.

We ran a screen on the tech sector for stocks with small market caps just above $300 million. We screened these stocks for those with high profitability, 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 six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬


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 stocks have impressive profitability? Use this list as a starting-off point for your own analysis.

List sorted by difference between gross margin and industry.

1. 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 $439.45M. TTM gross margin at 60.23% vs. industry gross margin at 36.17%. TTM operating margin at 10.58% vs. industry operating margin at 9.22%. TTM pretax margin at 10.98% vs. industry pretax margin at 8.70%. The stock has had a good month, gaining 12.08%.

2. 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 $419.51M. TTM gross margin at 46.65% vs. industry gross margin at 36.17%. TTM operating margin at 13.44% vs. industry operating margin at 9.29%. TTM pretax margin at 12.21% vs. industry pretax margin at 8.82%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.23). Might be undervalued at current levels, with a PEG ratio at 0.87, and P/FCF ratio at 13.62. The stock is a short squeeze candidate, with a short float at 12.16% (equivalent to 12.59 days of average volume). It's been a rough couple of days for the stock, losing 10.51% over the last week.

3. Iridium Communications Inc. (NASDAQ:IRDM): Provides mobile voice and data communications services through satellites to businesses. Market cap of $463.42M. TTM gross margin at 67.05% vs. industry gross margin at 52.22%. TTM operating margin at 19.72% vs. industry operating margin at 15.50%. TTM pretax margin at 17.24% vs. industry pretax margin at 13.38%. The stock is a short squeeze candidate, with a short float at 20.59% (equivalent to 18.73 days of average volume). The stock has had a good month, gaining 14.67%.

4. 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 $356.73M. TTM gross margin at 40.45% vs. industry gross margin at 36.17%. TTM operating margin at 12.32% vs. industry operating margin at 9.22%. TTM pretax margin at 11.15% vs. industry pretax margin at 8.70%. It's been a rough couple of days for the stock, losing 5.35% over the last week.

5. 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 $303.35M. TTM gross margin at 66.92% vs. industry gross margin at 61.21%. TTM operating margin at 28.70% vs. industry operating margin at 22.19%. TTM pretax margin at 26.51% vs. industry pretax margin at 16.03%. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 7.29%, current ratio at 1.42, and quick ratio at 1.38. The stock is a short squeeze candidate, with a short float at 8.55% (equivalent to 9.66 days of average volume). The stock has had a couple of great days, gaining 5.13% over the last week.

6. Badger Meter Inc. (NYSE:BMI): Engages in manufacturing and marketing liquid flow measurement and control technology products worldwide. Market cap of $497.60M. TTM gross margin at 39.07% vs. industry gross margin at 36.17%. TTM operating margin at 13.17% vs. industry operating margin at 9.29%. TTM pretax margin at 13.08% vs. industry pretax margin at 8.82%. The stock is a short squeeze candidate, with a short float at 7.92% (equivalent to 8.72 days of average volume). The stock has lost 21.74% over the last year.

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

Source: 6 Small-Cap Tech Stocks With Impressive Profitability