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If you are an investor who prefers growth opportunities, an obvious place to start your investigation is with small cap stocks. To minimize the risks associated with stocks at this level, it is key to analyze profitability and growth projections. When the two are well matched, a company is well positioned to utilize the profits to fuel growth. Keeping this in mind, we searched for profitable small-cap stocks in the basic materials sector that have EPS growth rates of 25% or better in the next year. We arrived at a list of stocks that warrant more research.

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.

The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.

We first looked for small cap basic materials stocks. Then we looked for companies that have high future earnings per share growth forecasts(5-year projected EPS Growth Rate>25%). Next, we screened for businesses that have achieved strong bottom line profitability (Net Margin [TTM]>10%)(1-year fiscal EPS Growth Rate>10%).

Do you think these small-cap stocks hold solid value? Use our screened list as a starting point for your own analysis.

1) Intrepid Potash, Inc. (IPI)

Sector:Basic Materials
Industry:Agricultural Chemicals
Market Cap:$1.65B
Beta:1.34

Intrepid Potash, Inc. has a five-year projected earnings per share growth rate of 45.00%, a net margin of 20.96%, and an earnings per share growth rate of 141.20%. The short interest was 9.24% as of August 16, 2012. Intrepid Potash, Inc. produces and markets muriate of potash and langbeinite under the Trio brand name primarily in the United States. Its langbeinite, sulfate of potash magnesia, is a low-chloride potassium fertilizer with the additional benefits of sulfate and magnesium, providing a multi‑nutrient product. The company also offers by-products, such as salt, magnesium chloride, and metal recovery salts.

2) Rex Energy Corporation (REXX)

Sector:Basic Materials
Industry:Oil & Gas Drilling & Exploration
Market Cap:$669.12M
Beta:2.23

Rex Energy Corporation has a five-year projected earnings per share growth rate of 50.00%, a net margin of 58.36%, and an earnings per share growth rate of 120.40%. The short interest was 22.68% as of August 16, 2012. Rex Energy Corporation operates as an independent oil and gas company in the Appalachian Basin and the Illinois Basin. It focuses on the Marcellus Shale drilling projects, and Utica Shale and Upper Devonian Shale exploration activities in the Appalachian Basin. The company also holds interests in the Lawrence Field ASP Flood project, which is an oil recovery project located in Lawrence County, Illinois.

3) Alumina Ltd. (AWC)

Sector:Basic Materials
Industry:Aluminum
Market Cap:$1.96B
Beta:2.02

Alumina Ltd. has a five-year projected earnings per share growth rate of 35.40%, a net margin of 63300.00%, and an earnings per share growth rate of 266.01%. The short interest was 0.13% as of August 16, 2012. Alumina Limited, through its 40% equity interest in Alcoa World Alumina and Chemicals, engages in the bauxite mining, alumina refining, and aluminum smelting businesses. It has interests in eight alumina refineries and eight bauxite mines, as well as operates two aluminum smelters in Victoria, Australia. The company also owns interests in a network of mines, refineries, and smelters in the United States, Guinea, Suriname, Jamaica, Brazil, and Spain. In addition, it owns and operates a shipping operation that transports alumina, aluminum, and raw materials worldwide.

4) Gulfport Energy Corp. (GPOR)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$1.41B
Beta:2.45

Gulfport Energy Corp. has a five-year projected earnings per share growth rate of 56.00%, a net margin of 43.26%, and an earnings per share growth rate of 105.89%. The short interest was 9.03% as of August 16, 2012. Gulfport Energy Corporation engages in the exploration, development, and production of oil and natural gas properties. Its principal properties are located in the Louisiana Gulf Coast, in west Texas in the Permian Basin and in western Colorado in the Niobrara Formation. The company also holds acreage position in the Alberta oil sands in Canada; and interests in entities that operate in southeast Asia, including the Phu Horm gas field in Thailand, as well as leasehold interests in the Utica Shale in eastern Ohio.

5) Thompson Creek Metals Company Inc. (TC)

Sector:Basic Materials
Industry:Industrial Metals & Minerals
Market Cap:$388.08M
Beta:2.73

Thompson Creek Metals Company Inc. has a five-year projected earnings per share growth rate of 54.50%, a net margin of 28.52%, and an earnings per share growth rate of 132.37%. The short interest was 12.82% as of August 16, 2012. Thompson Creek Metals Company Inc. engages in mining, milling, processing, and marketing of molybdenum products in the United States and Canada. Its principal properties include the Thompson Creek Mine, an open-pit molybdenum mine and concentrator located in Idaho; the Endako Mine, an open-pit molybdenum mine, concentrator, and roaster in British Columbia; and the Langeloth metallurgical facility in Pennsylvania.

The company also holds interests in exploration properties comprising the Berg property, a copper, molybdenum, and silver exploration project located in British Columbia; the Davidson property, an underground molybdenum exploration project in British Columbia; the Howard's Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut.

6) CARBO Ceramics Inc. (CRR)

Sector:Basic Materials
Industry:Oil & Gas Equipment & Services
Market Cap:$1.60B
Beta:0.83

CARBO Ceramics Inc. has a five-year projected earnings per share growth rate of 35.20%, a net margin of 19.86%, and an earnings per share growth rate of 65.14%. The short interest was 28.82% as of August 16, 2012. CARBO Ceramics Inc. manufactures and supplies resin-coated ceramic and resin-coated sand proppants primarily used in the hydraulic fracturing of natural gas and oil wells in the United States and internationally.

The company offers proppants, including CARBOHSP and CARBOPROP designed for use in deep gas wells; CARBOLITE used in medium depth oil and gas wells; CARBOECONOPROP; CARBOHYDROPROP used to enhance performance in slickwater fracture treatments; CARBOBOND LITE for oil and natural gas wells that are subject to the risk of proppant flow-back; and CARBOBOND RCS, a conductivity proppant. It also provides fracture simulation software, as well as offers fracture design, engineering, and consulting services to oil and natural gas companies.

7) GulfMark Offshore, Inc. (GLF)

Sector:Basic Materials
Industry:Oil & Gas Equipment & Services
Market Cap:$984.12M
Beta:1.40

GulfMark Offshore, Inc. has a five-year projected earnings per share growth rate of 49.50%, a net margin of 12.37%, and an earnings per share growth rate of 239.94%. The short interest was 5.38% as of August 16, 2012. GulfMark Offshore, Inc. provides offshore marine support and transportation services primarily to companies involved in the offshore exploration and production of oil and natural gas. Its vessels offer various services supporting the construction, positioning, and ongoing operation of offshore oil and natural gas drilling rigs and platforms, and related infrastructure. The company's vessels transport materials, supplies, and personnel to offshore facilities, as well as move and position drilling structures.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz.

Source: 7 Profitable Small Cap Basic Materials Stocks Projected For Growth