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Searching for good small cap investments is always an interesting activity. Small cap stocks tend to offer investors greater growth opportunities than larger alternatives, although this comes with its fair share of added risk. One strategy for picking good small caps is to look for companies that have solid fundamentals. If you're looking for stocks that fit this category, you'll especially like what we put in our list today, because not only did we focus on stocks that are set for growth due to strong fundamentals, we also honed in on companies that look undervalued from a price-multiple perspective.

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 forward P/E is a price multiple valuation metric, which is similar to the current P/E ratio, except that it uses the forecasted earnings instead. While this number might not be as accurate because it uses "forecasted" numbers, it does offer the benefit of illustrating analysts' expectations of a firm. If the market believes that earnings will grow moving forward, then the forward P/E should be lower than the current P/E. Financial Leverage, also known as the Equity Multiplier, illustrates how a firm is financing its assets. The lower the number the more a firm is financing its assets internally through stockholder equity. The higher this metric is the more the firm is relying on debt to finance its assets.

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 consumer stocks. Next, we then screened for businesses that are trading at a discount (P/S<1)(forward P/E<10). We then looked for companies that are considered high-growth, with 1-year projected EPS growth above 25%.

Do you think these small-cap stocks have strong enough fundamentals to move higher? Use our list along with your own analysis.

1) Modine Manufacturing Company (NYSE:MOD)

Sector:Consumer Goods
Industry:Auto Parts
Market Cap:$312.16M

Modine Manufacturing Company has a Price/Sales Ratio of 0.20, a Forward Price/Earnings Ratio of 6.55, and a 1-Year Projected Earnings Per Share Growth Rate of 56.92%. The short interest was 4.12% as of 06/20/2012. Modine Manufacturing Company engages in the development, manufacture, and marketing of heat exchangers and systems for use in on-highway and off-highway original equipment manufacturer (OEM) vehicular applications, and to various building, industrial, and refrigeration markets. It offers power train cooling products, including engine cooling modules, radiators, charge-air-coolers, condensers, oil coolers, fan shrouds, and surge tanks; on-engine cooling products comprising exhaust gas recirculation coolers, engine oil coolers, fuel coolers, charge-air-coolers, and intake air coolers; oil coolers consisting of transmission oil coolers and power steering coolers; fuel coolers; and component assemblies and radiators for special applications. The company also provides gas-fired, hydronic, electric, and oil-fired unit heaters; indoor and outdoor duct furnaces; infrared units; hydronic products, including commercial fin-tube radiation, cabinet unit heaters, and convectors; roof mounted direct and indirect fired makeup air units; commercial packaged rooftop ventilation units; unit ventilators; single packaged vertical units; geo-thermal heat pumps; precision air conditioning units for data center applications; chillers; ceiling cassettes; and condensing units.

2) Amerigon Inc. (ARGN)

Sector:Consumer Goods
Industry:Auto Parts
Market Cap:$353.42M

Amerigon Inc. has a Price/Sales Ratio of 0.76, a Forward Price/Earnings Ratio of 9.80, and a 1-Year Projected Earnings Per Share Growth Rate of 50.62%. The short interest was 9.09% as of 06/20/2012. Amerigon Incorporated engages in the design, development, and marketing of electronic components and systems based on thermoelectric device technologies for heating and cooling applications. The company principally offers the Climate Control Seat, a variable temperature seat climate control system that provides temperature comfort to automobile passengers. It also provides automotive seat comfort systems, including automotive seat heaters, climate comfort systems for automotive seats, automotive steering wheel heater systems, and integrated electronic components; and specialized automotive cable systems comprising ready-made wire harnesses and related wiring products. The company sells its products to automobile and light truck original equipment manufacturers or their tier one seating suppliers, as well as to the automotive aftermarket, ski lifts, and sports stadiums primarily in the United States, Germany, Korea, China, Japan, Mexico, Canada, the United Kingdom, and Taiwan.

3) Diamond Foods, Inc. (NASDAQ:DMND)

Sector:Consumer Goods
Industry:Processed & Packaged Goods
Market Cap:$407.23M

Diamond Foods, Inc. has a Price/Sales Ratio of 0.42, a Forward Price/Earnings Ratio of 6.24, and a 1-Year Projected Earnings Per Share Growth Rate of 36.41%. The short interest was 51.31% as of 06/20/2012. Diamond Foods, Inc. engages in processing, marketing, and distributing snack products. It provides snack products, including roasted, glazed and flavored nuts, trail mixes, dried fruit, seeds, microwave popcorn products, and potato and tortilla chips under the Emerald, Pop Secret, and Kettle brands. The company also offers culinary, in-shell, and ingredient nuts under the Diamond of California brand name.

4) Mercer International Inc. (NASDAQ:MERC)

Sector:Consumer Goods
Industry:Paper & Paper Products
Market Cap:$339.70M

Mercer International Inc. has a Price/Sales Ratio of 0.31, a Forward Price/Earnings Ratio of 6.77, and a 1-Year Projected Earnings Per Share Growth Rate of 210.30%. The short interest was 1.59% as of 06/20/2012. Mercer International Inc., together with its subsidiaries, engages in the manufacture and sale of northern bleached softwood kraft (NBSK) pulp primarily in North America, Europe, and Asia. It produces NBSK pulp principally from wood chips and pulp logs, as well as carbon neutral or green energy using carbon-neutral biofuels, such as black liquor and wood waste. The company sells its pulp to tissue, specialty paper, and other paper product manufacturers; and green energy to third party utilities.

5) Fabrinet (NYSE:FN)

Sector:Consumer Goods
Industry:Electronic Equipment
Market Cap:$419.50M

Fabrinet has a Price/Sales Ratio of 0.69, a Forward Price/Earnings Ratio of 7.61, and a 1-Year Projected Earnings Per Share Growth Rate of 32.23%. The short interest was 4.55% as of 06/20/2012. Fabrinet provides precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers (OEMs) of optical communication components, modules and sub-systems, and industrial lasers and sensors. It provides a range of advanced optical and electro-mechanical capabilities across the manufacturing process, including process design and engineering, supply chain management, manufacturing, final assembly, and test. The company focuses primarily on low-volume production of various high complexity products, which it refers to as low-volume, high-mix'.

6) Meritor, Inc. (NYSE:MTOR)

Sector:Consumer Goods
Industry:Auto Parts
Market Cap:$501.75M

Meritor, Inc. has a Price/Sales Ratio of 0.10, a Forward Price/Earnings Ratio of 3.21, and a 1-Year Projected Earnings Per Share Growth Rate of 32.79%. The short interest was 8.30% as of 06/20/2012. Meritor, Inc. designs, develops, manufactures, sells, markets, distributes, services, and supports integrated systems, modules, and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation, and industrial sectors. The company operates in three segments: Commercial Truck, Industrial, and Aftermarket and Trailer. The Commercial Truck segment supplies drivetrain systems and components, including axles, drivelines, and braking and suspension systems, primarily for medium- and heavy-duty trucks.

*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.