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Interested in following smaller companies? Interested in industrial stocks? Looking for undervalued stocks? Do you prefer stocks that analysts rate as 'Buy'? Keeping this idea in mind, we ran a screen you might be interested in.

The Price/Sales ratio is a price-multiple valuation metric used to help identify if a firm is cheap by its twelve month trailing sales numbers. In the most basic terms it let's an investor know how much the investment community is willing to pay for every dollars worth of sales. A firm with a P/S ratio of one or lower would be viewed as cheap because investors are paying $1 or less for every dollars worth of a firm's sales. On the other hand, a firm is generally considered to be expensive when the P/S ratio is above three. These are general guidelines used by the investment community not hard rules to be clear. Price/Sales Ratio = Current Stock Price/Revenue (sales) per Share

The PEG ratio (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth. In general, the P/E ratio is higher for a company with a higher growth rate. Thus using just the P/E ratio would make high-growth companies appear overvalued relative to others. It is assumed that by dividing the P/E ratio by the earnings growth rate, the resulting ratio is better for comparing companies with different growth rates. A lower ratio is 'better' (cheaper) and a higher ratio is 'worse' (expensive) - a PEG ratio of 1 means the company is fairly priced.

We first looked for small cap industrial stocks. We then looked for companies that are trading at a discount (P/S<1)(PEG < 1). We next screened for businesses that analysts rate as "Buy" (2 < mean recommendation < 3).

Do you think these small-cap stocks are worth more than the market currently says? Use our list along with your own analysis.

1) Astec Industries, Inc. (NASDAQ:ASTE)

Sector:Industrial Goods
Industry:Farm & Construction Machinery
Market Cap:$653.79M
Beta:1.17

Astec Industries, Inc. has a Price/Sales Ratio of 0.66 and Price/Earnings to Growth Ratio of 0.70 and Analysts' Rating of 2.20. The short interest was 4.81% as of 05/22/2012. Astec Industries, Inc. engages in the design, engineering, manufacture, and marketing of equipment and components for road building, utility, and related construction activities worldwide. The company's Asphalt Group segment offers hot-mix asphalt plants, concrete mixing plants, and related components; heating and heat transfer processing equipment; and thermal fluid storage tanks for asphalt paving and other non-related industries. Its Aggregate and Mining Group segment provides jaw, cone, and impact crushers; vibrating feeders; inclined and horizontal screens; various crushing plants; digital crusher controllers; aggregate and ore processing equipment; mobile screening plants; screen structures; vibrating screens; stationary rockbreaker systems; articulated production and utility vehicles; hydraulic breakers; compactors; demolition attachments; and bulk material handling and minerals processing equipment primarily for the aggregate, metallic mining, and recycling markets.

2) Ameresco, Inc. (NYSE:AMRC)

Sector:Industrial Goods
Industry:Industrial Electrical Equipment
Market Cap:$503.63M
Beta:-

Ameresco, Inc. has a Price/Sales Ratio of 0.69 and Price/Earnings to Growth Ratio of 0.84 and Analysts' Rating of 1.60. The short interest was 5.43% as of 05/22/2012. Ameresco, Inc. provides energy efficiency solutions for facilities in North America. The company engages in the design, engineering, development, and installation of projects that reduce the energy, and operations and maintenance costs of its customers' facilities. These projects primarily include various measures customized for the facility and designed to enhance the efficiency of building systems, such as heating, ventilation, air conditioning, and lighting systems.

3) AAR Corp. (NYSE:AIR)

Sector:Industrial Goods
Industry:Aerospace/Defense Products & Services
Market Cap:$519.74M
Beta:1.24

AAR Corp. has a Price/Sales Ratio of 0.26 and Price/Earnings to Growth Ratio of 0.48 and Analysts' Rating of 2.00. The short interest was 5.59% as of 05/22/2012. AAR CORP. provides products and services to aviation, government, and defense markets worldwide. The company's Aviation Supply Chain segment purchases and sells new, overhauled, and repaired engine and airframe parts and components. It also repairs, overhauls, and sells avionics, electrical, electronic, fuel, hydraulic, and pneumatic components and instruments, as well as internal airframe components; and provides customized inventory supply and management programs for engine and airframe parts and components.

4) Global Power Equipment Group Inc. (NYSE:GLPW)

Sector:Industrial Goods
Industry:Diversified Machinery
Market Cap:$300.65M
Beta:1.41

Global Power Equipment Group Inc. has a Price/Sales Ratio of 0.66 and Price/Earnings to Growth Ratio of 0.38 and Analysts' Rating of 2.20. The short interest was 3.63% as of 05/22/2012. Global Power Equipment Group Inc. and its subsidiaries designs, engineers, and manufactures gas turbine auxiliary equipment; and provides routine and specialty maintenance services to customers in the utility and industrial sectors. Its gas turbine auxiliary equipment include filter houses, inlet systems, exhaust systems, diverter dampers, selective catalytic emission reduction systems, packaged skids, and precision parts and specialty fabrications. These products are primarily used in the operation of gas turbine power plants, as well as for other industrial, energy, and power-related applications.

5) Altra Holdings, Inc. (NASDAQ:AIMC)

Sector:Industrial Goods
Industry:Industrial Electrical Equipment
Market Cap:$456.36M
Beta:2.04

Altra Holdings, Inc. has a Price/Sales Ratio of 0.65 and Price/Earnings to Growth Ratio of 0.80 and Analysts' Rating of 1.60. The short interest was 4.90% as of 05/22/2012. Altra Holdings, Inc., through its subsidiary, Altra Industrial Motion, Inc., designs, produces, and markets a range of mechanical power transmission and motion control products worldwide. The company provides industrial clutches and brakes for elevators, forklifts, lawn mowers, oil well draw works, punch presses, and conveyors; open and enclosed gearing products for conveyors, ethanol mixers, packaging machinery, and metal processing equipment; and engineered couplings for extruders, turbines, steel strip mills, and pumps.

6) Cascade Corp. (NYSE:CASC)

Sector:Industrial Goods
Industry:Farm & Construction Machinery
Market Cap:$523.12M
Beta:1.85

Cascade Corp. has a Price/Sales Ratio of 0.98 and Price/Earnings to Growth Ratio of 0.77 and Analysts' Rating of 2.00. The short interest was 2.56% as of 05/22/2012. Cascade Corporation engages in the manufacture and distribution of materials handling load engagement devices and related replacement parts under the Cascade name primarily for the lift truck and construction industries worldwide. It offers lift truck related products that are designed to handle loads with pallets and for specialized application loads without pallets; and specialized products, which include devices specifically designed to handle appliances, carpet and paper rolls, baled materials, textiles, beverage containers, drums, canned goods, bricks, masonry blocks, lumber, and plywood, as well as boxed, packaged, and containerized products. The company also provides construction related products to enable loaders, backhoes, and rough terrain lift trucks to move materials, as well as for use on excavators and loaders for conventional and specialized ground engagement applications. Its customers include lift truck original equipment manufacturers (OEM), original equipment dealers, and distributors; and OEMs who manufacture construction, mining, agricultural, and industrial vehicles.

*Company profiles were sourced from Finviz. Financial data was sourced from Finviz.

Source: 6 Undervalued Small Cap Industrials With Analyst Love