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  • 5 Low-Debt Small Cap Stocks With Growth On The Horizon 0 comments
    Sep 28, 2012 9:26 AM | about stocks: BLOX, IMPV, IRF, MM, SPSC

    For investors who prioritize growth opportunities above all else, we have pulled together a list of small cap stocks that have exceptionally high projected EPS growth rates for the coming year. To even out the risk that tends to accompany investing in small cap stocks, we reviewed the debt ratios for each of these companies. They all have minimal debt, which provides assurance that they can focus on growth instead of paying off creditors. Additionally, they have not compromised their capital infrastructure by over borrowing. Take a look at the list of small cap stocks below to see if any grab your attention and lead you to take a deeper look.

    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.

    The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.

    The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.

    We first looked for small cap stocks. From here, we then looked for companies that are considered high-growth, with 1-year projected EPS growth above 25%. From here, we then looked for companies that operate with little to no debt (D/E Ratio<.1). We next screened for businesses that operate with little to no long term debt (Long Term D/E Ratio<.1). We did not screen out any sectors.

    Do you think these small-cap stocks deserve to grow higher? Use our screened list as a starting point for your own analysis.

    1) Imperva Inc. (NYSE:IMPV)

    Sector Technology
    Industry Application Software
    Market Cap $884.35M
    Beta -

    IMPV stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate 358.30%
    Debt/Equity Ratio 0.00
    Long Term Debt/Equity Ratio 0.00
    Short Interest 9.79%

    Imperva, Inc. engages in the development, marketing, sales, service, and support of data security solutions that provide visibility and control over high value business data across critical systems within the data center. It offers SecureSphere Data Security Suite, a solution designed to prioritize and mitigate risks to high-value business data, protect against hackers and malicious insiders, and address and streamline regulatory compliance. e-attack prevention that deliver on-demand Web application security. Imperva, Inc. provides its products and services to a range of customers, including banks, retailers, insurers, technology and telecommunication companies, and hospitals, as well as national, state, and local government agencies worldwide. The company was formerly known as WebCohort Inc. and changed its name to Imperva, Inc. in February 2004. Imperva, Inc. was founded in 2002 and is headquartered in Redwood Shores, California.

    2) International Rectifier Corporation (NYSE:IRF)

    Sector Technology
    Industry Semiconductor - Integrated Circuits
    Market Cap $1.17B
    Beta 1.58

    IRF stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate 348.70%
    Debt/Equity Ratio 0.00
    Long Term Debt/Equity Ratio 0.00
    Short Interest 6.17%

    International Rectifier Corporation designs, manufactures, and markets power management semiconductors for distributors, original equipment manufacturers, and contract manufacturers in the Americas, Europe, and Asia. International Rectifier Corporation was founded in 1947 and is headquartered in El Segundo, California.

    3) SPS Commerce, Inc. (NASDAQ:SPSC)

    Sector Services
    Industry Business Services
    Market Cap $521.42M
    Beta -

    SPSC stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate 600.00%
    Debt/Equity Ratio 0.00
    Long Term Debt/Equity Ratio 0.00
    Short Interest 3.78%

    SPS Commerce, Inc. provides on-demand supply chain management solutions worldwide. It offers integration, collaboration, connectivity, visibility, and data analytics over the Internet using a software-as-a-service model. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

    4) Millennial Media Inc. (NYSE:MM)

    Sector Services
    Industry Marketing Services
    Market Cap $1.09B
    Beta -

    MM stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate 340.00%
    Debt/Equity Ratio 0.00
    Long Term Debt/Equity Ratio 0.00
    Short Interest 5.92%

    Millennial Media, Inc. provides mobile advertising solutions worldwide. It operates MYDAS, a mobile advertising technology platform for developers and advertisers. The company provides tools and services to developers that allow their apps to display banner ads, interactive rich media ads, and video ads through its platform. It also enables advertisers to gain insights into the performance of their ad campaigns and to manage their campaigns. The company was founded in 2006 and is headquartered in Baltimore, Maryland.

    5) Infoblox Inc. (NYSE:BLOX)

    Sector Services
    Industry Business Services
    Market Cap $1.07B
    Beta -

    BLOX stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate 383.33%
    Debt/Equity Ratio 0.00
    Long Term Debt/Equity Ratio 0.00
    Short Interest 1.32%

    Infoblox Inc. develops, markets, and sells automated network control solutions worldwide. Its appliance-based solution combines real-time IP address management with the automation of network control, and network change and configuration management processes in physical and virtual appliances. Infoblox Inc. sells its solution through channel partners, including distributors, integrators, managed service providers, and value-added resellers, as well as through a field sales force. The company was founded in 1999 and is headquartered in Santa Clara, California.

    *Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/27/2012.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Business relationship disclosure: This article was prepared for ZetaKap Media by one of our full-time analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

    Stocks: BLOX, IMPV, IRF, MM, SPSC
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