Small-cap stocks tend to offer investors greater growth opportunities than large-cap alternatives, although this comes with its fair share of added risk. To mitigate that risk, we searched for companies whose fundamentals indicate that they are set for near-term growth. As a way to hone in on the cream of the crop, we only looked at companies with strong analyst ratings. You might be interested in the list our screen produced.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
We first looked for small cap industrial stocks. We then screened for businesses that analysts rate as "Strong Buy" (mean recommendation < 2). We then looked for companies that have expected earnings per share growth of more than 25 percent for next year(1-year projected EPS Growth Rate>25%).
Do you think these small-cap stocks hold solid value? Use this list as a starting-off point for your own analysis.
1) Trex Co. Inc. (TREX)
|Industry:||General Building Materials|
Trex Co. Inc. has a Analysts' Rating of 1.20, and a 1-Year Projected Earnings Per Share Growth Rate of 32.22%. The short interest was 21.50% as of 06/06/2012. Trex Company, Inc. manufactures and distributes wood/plastic composite products, and related accessories primarily for the residential and commercial decking and railing applications in the United States. The company offers decking products, including Trex Transcend and Trex Enhance protective shells for protection against fading, staining, and scratching; Trex Accents that provides a smooth surface on one side and subtle wood grain on the other; Trex Escapes, a cellular PVC deck board; and Trex Hideaway, a hidden fastening system for specially grooved boards. It also provides railing products comprising Trex Designer Series Railing, which consists of a decorative top and bottom rail, refined balusters, and post caps and skirts; and Trex Transcend Railing for use with Trex decking products, as well as other decking materials. In addition, the company offers Trex Transcend Porch Flooring and Railing System, an integrated system of porch components and accessories; and fencing products, such as Trex Seclusions fencing product that uses interlocking pickets for privacy, and Trex Surroundings fencing that uses traditional pickets.
2) Powell Industries, Inc. (POWL)
|Industry:||Industrial Electrical Equipment|
Powell Industries, Inc. has a Analysts' Rating of 1.40, and a 1-Year Projected Earnings Per Share Growth Rate of 57.45%. The short interest was 3.28% as of 06/06/2012. Powell Industries, Inc. engages in the design, development, manufacture, and servicing of custom engineered-to-order equipment and systems for the management and control of electrical energy and other critical processes in transportation, environmental, energy, industrial, and utility industries. The company operates in two segments, Electrical Power Products and Process Control Systems. The Electrical Power Products segment offers electrical power distribution and control systems that are used to distribute, monitor, and control the flow of electrical energy, as well as to provide protection to motors, transformers, and other electrically-powered equipment.
3) LSB Industries Inc. (LXU)
|Industry:||General Building Materials|
LSB Industries Inc. has a Analysts' Rating of 1.30, and a 1-Year Projected Earnings Per Share Growth Rate of 43.20%. The short interest was 3.09% as of 06/06/2012. LSB Industries, Inc., through its subsidiaries, engages in the manufacture and sale of geothermal and water source heat pumps, air handling products, and chemical products. The company operates in two segments, Climate Control Business and Chemical Business. The Climate Control Business segment manufactures and sells heating, ventilation, and air conditioning (HVAC) products that include geothermal and water source heat pumps; hydronic fan coils; and other HVAC products, such as custom air handlers and modular geothermal chillers.
4) Heritage-Crystal Clean, Inc (HCCI)
Heritage-Crystal Clean, Inc has a Analysts' Rating of 1.30, and a 1-Year Projected Earnings Per Share Growth Rate of 229.41%. The short interest was 4.84% as of 06/06/2012. Heritage-Crystal Clean, Inc. provides industrial and hazardous waste services to small and mid-sized customers in the United States. Its services comprise parts cleaning, containerized waste management, used oil collection and re-refining, and vacuum truck services.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.