Small-cap stocks tend to offer investors greater growth opportunities than large-cap alternatives, although this comes with its fair share of added risk. One way to mitigate that risk is to focus on small caps that have two traits: strong projected growth on the horizon, and ratings of 'Strong Buy' by industry analysts. Today we focused our screen on these sorts of stocks, and came up with a diverse, but rather interesting list.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 5-Year Expected EPS Growth Rate is a long term annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
We first looked for small cap stocks. From here, we then looked for companies with projected high growth, measured by 5-year projected EPS growth above 25%. We next screened for businesses that analysts rate as "Strong Buy" (mean recommendation < 2). We did not screen out any sectors.
Do you think these small-cap stocks will break through to new highs? Please use our list to assist with your own analysis.
1) NetQin Mobile Inc. (NQ)
NetQin Mobile Inc. has a 5-Year Projected Earnings Per Share Growth Rate of 40.00%, and a Analysts' Rating of 1.30. The short interest was 1.11% as of 06/19/2012. NQ Mobile Inc. operates as a provider of mobile Internet services focusing on security, privacy, and productivity worldwide. It provides a suite of mobile Internet services that protect mobile users from security threats and enhance their productivity. The company offers mobile security services, including mobile malware scanning, Internet firewall, account and communication safety, anti-theft, performance optimization, hostile software rating and reporting, and other services to protect users from mobile malware threats, data theft, and privacy intrusion.
2) Bebe Stores, Inc. (BEBE)
Bebe Stores, Inc. has a 5-Year Projected Earnings Per Share Growth Rate of 30.50%, and a Analysts' Rating of 1.30. The short interest was 4.51% as of 06/19/2012. bebe stores, inc. engages in the design, development, and production of women's apparel and accessories. Its products include a range of separates, tops, dresses, active wear, and accessories in career, evening, casual, and active lifestyle categories. The company markets its products under the bebe, BEBE SPORT, bbsp, and 2b bebe brand names targeting 21 to 34-year-old woman.
3) Ellie Mae, Inc. Common Stock (ELLI)
Ellie Mae, Inc. Common Stock has a 5-Year Projected Earnings Per Share Growth Rate of 32.13%, and a Analysts' Rating of 1.50. The short interest was 2.02% as of 06/19/2012. Ellie Mae, Inc., together with its subsidiaries, provides business automation software for the mortgage industry in the United States. Its on-demand technology-enabled software solutions help streamline and automate the process of originating and funding new mortgage loans facilitating regulatory compliance and reducing documentation errors. It provides mortgage originators with Encompass software, an operating system, which handles business and management functions involved in running a mortgage origination business, as well as provides access to the lenders and service providers on the Ellie Mae Network.
4) Liquidity Services, Inc. (LQDT)
|Industry:||Catalog & Mail Order Houses|
Liquidity Services, Inc. has a 5-Year Projected Earnings Per Share Growth Rate of 29.67%, and a Analysts' Rating of 1.40. The short interest was 7.98% as of 06/19/2012. Liquidity Services, Inc. operates various online auction marketplaces for surplus and salvage assets in the United States. Its auction marketplaces include liquidation.com, which enables corporations and selected government agencies located in the United States to sell surplus and salvage consumer goods and capital assets; govliquidation.
5) Bona Film Group Limited (BONA)
|Industry:||Entertainment - Diversified|
Bona Film Group Limited has a 5-Year Projected Earnings Per Share Growth Rate of 45.47%, and a Analysts' Rating of 1.40. The short interest was 0.29% as of 06/19/2012. Bona Film Group Limited engages in the distribution of films in the People's Republic of China and internationally. Its film distribution activities include film sourcing, which comprises identifying film projects with commercial potential and securing film distribution rights; print and marketing that includes coordinating the distribution of film prints to theater circuits, as well as conducting marketing and publicity campaigns to promote the films to their target audiences; exhibition, which comprises negotiating the terms of exhibitions of films in domestic and international movie theaters, as well as through non-theatrical distribution channels; and film advertising that includes the sale of advertising time immediately prior to the start of the theatrical screening of a film, in-film product placements, and cross-promotion campaigns. The company is also involved in the film investment and production, television production, and movie theater operation activities; and provision of talent agency services to artists.
6) NPS Pharmaceuticals, Inc. (NPSP)
NPS Pharmaceuticals, Inc. has a 5-Year Projected Earnings Per Share Growth Rate of 80.00%, and a Analysts' Rating of 1.30. The short interest was 6.50% as of 06/19/2012. NPS Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development of therapeutic products for gastrointestinal and endocrine disorders, and various medical needs. The company's primary clinical programs include two therapeutic peptides to restore or replace biological functions comprising GATTEX, a Phase 3 clinical trial product for short bowel syndrome; and Natpara, a recombinant human parathyroid hormone 1-84, which is in Phase 3 clinical development trials. It also develops NPSP790 and NPSP795 calcilytic compounds that are in Phase I trials for the treatment of rare endocrine disorders.
7) The Active Network, Inc. (ACTV)
The Active Network, Inc. has a 5-Year Projected Earnings Per Share Growth Rate of 32.50%, and a Analysts' Rating of 1.30. The short interest was 3.98% as of 06/19/2012. The Active Network, Inc. provides organization-based cloud computing applications services to business customers in North America, Europe, and internationally. The company offers ActiveWorks, an organization-based cloud computing platform, which transforms the way organizers record, track, manage, and share information regarding activities and events. Its ActiveWorks back-office system pulls customers' participant management, operational reporting, volunteer management, and service and payment processing functions into one hosted system.
8) Corcept Therapeutics Incorporated (CORT)
Corcept Therapeutics Incorporated has a 5-Year Projected Earnings Per Share Growth Rate of 30.00%, and a Analysts' Rating of 1.40. The short interest was 5.87% as of 06/19/2012. Corcept Therapeutics Incorporated, a pharmaceutical company, engages in the discovery, development, and commercialization of drugs for the treatment of severe metabolic and psychiatric disorders. It focuses on disorders that are associated with a steroid hormone called cortisol. The company focuses on commercializing Korlym (mifepristone) 300 mg Tablet, a once-daily oral medication for treatment of hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing's syndrome, who have type 2 diabetes mellitus or glucose intolerance and have failed surgery or are not candidates for surgery.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Google Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.