7 Low-Debt Small-Cap Stocks Set For Growth

by: ZetaKap

There are times when you come across a company that piques your interest and after more research it becomes apparent that now is a good time to buy. More often, though, most stocks fall into the category of wait and see because of their size, the price, or a variety of other factors. With this in mind, we ran a screen of small-cap stocks with the attributes of manageable debt ratios and projected EPS growth rates above 25% for the next five years. These characteristics demonstrate that a company has been fiscally responsible by not over borrowing against assets to fund growth and that it is well positioned for expansion. Take a look at these small-cap stocks to determine for yourself if these companies make your list for ones to keep on your radar.

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 with its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it with 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.

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 that have maintained a sound long-term capital structure (Long Term D/E Ratio<.1). From here, we then looked for companies with projected high growth, measured by 5-year projected EPS growth above 25%. We did not screen out any sectors.

Do you think these small-cap stocks are undervalued and should be trading higher? Use our list to help with your own analysis.

1) Kimball International, Inc. (KBALB)

Sector Technology
Industry Printed Circuit Boards
Market Cap $352.93M
Beta 1.46

KBALB stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
5-Year Projected Earnings Per Share Growth Rate 27.70%
Short Interest 4.19%

Kimball International, Inc. manufactures and sells electronic assemblies and furniture in the United States, Poland, the United Kingdom, and internationally. The company operates in two segments, Electronic Manufacturing Services and Furniture. The EMS segment produces electronic assemblies, circuit boards, and wiring harnesses for electronic organs and keyboards. Its engineering and manufacturing services include design support, new product launch, production and testing of printed circuit board assemblies, industrialization and automation of manufacturing processes, product and process validation and qualification, testing of products under a series of harsh conditions, assembly and packaging of electronic and other related products, and product life cycle management.

This segment serves the medical, automotive, industrial, and public safety industries. The Furniture segment offers office furniture under the Kimball Office and National names; and hospitality furniture under the Kimball Hospitality name. The Kimball Office and National branded products include desks, credenzas, seating, tables, collaborative workstations, contemporary cubicle systems, filing and storage units and accessories; and Kimball Hospitality branded products include headboards, desks, tables, dressers, entertainment centers, chests, wall panels, upholstered seating, task seating, and vanities for hotel properties, condominiums, and mixed use developments.

This segment markets office furniture through its salespersons to end users, office furniture dealers, wholesalers, rental companies, and catalog houses; and hospitality furniture through independent manufacturers' representatives to end users. The company was incorporated in 1939 and its headquarters is in Jasper, Indiana.

2) MakeMyTrip Limited (NASDAQ:MMYT)

Sector Services
Industry General Entertainment
Market Cap $645.10M
Beta -

MMYT stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
5-Year Projected Earnings Per Share Growth Rate 44.93%
Short Interest 2.25%

MakeMyTrip Limited, an online travel company, provides travel products and solutions in India and the United States. Its products and services include air tickets, hotels, packages, rail tickets, bus tickets, car hire, and ancillary travel requirements, such as travel insurance and visa processing. The company, through its Website, makemytrip.com, allow travelers to research, plan, book and purchase a range of travel services and products in India and internationally. MakeMyTrip Limited also provides its products and services through other technology-enhanced distribution channels, such as call centers, travel stores, travel agents' network, and mobile service platform.

Its customers include leisure travelers and small businesses. The company was formerly known as International Web Travel Private Limited and changed its name to MakeMyTrip Limited in April 2010. MakeMyTrip Limited was founded in 2000 and its headquarters is in Gurgaon, India.

3) Acacia Research Corporation (NASDAQ:ACTG)

Sector Services
Industry Research Services
Market Cap $1.42B
Beta 1.26

ACTG stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
5-Year Projected Earnings Per Share Growth Rate 38.00%
Short Interest 4.75%

Acacia Research Corporation, through its subsidiaries, acquires, develops, licenses, and enforces patented technologies in the United States. It assists patent owners with the prosecution and development of their patent portfolios; protection of their patented inventions from unauthorized use; generation of licensing revenue from users of their patented technologies; and enforcement against unauthorized users of their patented technologies. The company owns or controls the rights to approximately 200 patent portfolios, which include the United State's patents and foreign counterparts covering technologies used in various industries. Acacia Research Corporation was founded in 1992 and is based in Newport Beach, California.

4) The Active Network, Inc. (NYSE:ACTV)

Sector Technology
Industry Application Software
Market Cap $769.23M
Beta -

ACTV stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
5-Year Projected Earnings Per Share Growth Rate 31.67%
Short Interest 6.00%

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.

The company also provides consulting services, which consist primarily of business mapping, project management services, and guidance on best practices in using its services; and implementation services, including system set-up and configuration, and data conversion, as well as develops customized training and education programs relating to both the use and administration of its services. It serves a range of customers, including community and sports organizations, large corporations, small and medium-sized businesses, educational institutions, federal and state government agencies, non-profit organizations, and other related entities. The company was formerly known as Racegate.com, Inc. and changed its name to The Active Network, Inc. in May 2001. The Active Network, Inc. was founded in 1998 and its headquarters is in San Diego, California.

5) Tangoe, Inc. (NASDAQ:TNGO)

Sector Technology
Industry Business Software & Services
Market Cap $491.77M
Beta -

TNGO stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
5-Year Projected Earnings Per Share Growth Rate 39.30%
Short Interest 14.23%

Tangoe, Inc. provides communications lifecycle management software and services primarily to large and medium-sized businesses, and other organizations worldwide. The company offers an on-demand Communications Management Platform, which is a suite of software to manage and optimize the complex processes and expenses associated with the lifecycle of an enterprise's fixed and mobile communications assets and services, including planning and sourcing, procurement and provisioning, inventory and usage management, mobile device management, invoice processing, expense allocation and accounting, and asset decommissioning and disposal.

It also provides strategic consulting and other services, including sourcing, strategic advise, bill auditing, inventory optimization, mobile optimization, and policy administration; and implementation services, which include data conversion, system configuration, and process review and corporate system integration services that assist customers in the setup and deployment of CMP. Tangoe markets and sells its solution directly and through indirect distribution channel partners. The company was formerly known as TelecomRFQ, Inc. and changed its name to Tangoe, Inc. in December 2001. Tangoe, Inc. was founded in 2000 and its headquarters is in Orange, Connecticut.

6) Echo Global Logistics, Inc. (NASDAQ:ECHO)

Sector Services
Industry Trucking
Market Cap $402.92M
Beta -

ECHO stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
5-Year Projected Earnings Per Share Growth Rate 30.44%
Short Interest 13.49%

Echo Global Logistics, Inc. provides technology-enabled transportation and supply chain management services in the United States. Its Web-based technology platform compiles and analyzes data from its network of approximately 24,000 transportation providers to serve clients' shipping and freight management needs. The company offers services across various transportation modes, including truckload, less-than truck-load, small parcel, inter-modal, domestic air, expedited, and international. Its logistics services comprise rate negotiation; shipment execution and tracking; carrier management; routing compliance; freight bill audit and payment; and performance management and reporting functions, including executive dashboard tools. As of December 31, 2011, the company procured transportation and provided logistics services for approximately 29,300 clients operating in various industries, such as manufacturing, construction, consumer products, and retail. Echo Global Logistics, Inc. was founded in 2005 and its headquarters is in Chicago, Illinois.

7) OSI Systems, Inc. (NASDAQ:OSIS)

Sector Technology
Industry Semiconductor Equipment & Materials
Market Cap $1.52B
Beta 0.99

OSIS stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.01
5-Year Projected Earnings Per Share Growth Rate 28.50%
Short Interest 3.16%

OSI Systems, Inc., together with its subsidiaries, designs and manufactures electronic systems and components for homeland security, healthcare, defense, and aerospace markets worldwide. The company operates in three divisions: Security, Healthcare, and Optoelectronics and Manufacturing. The Security division provides security and inspection systems under the Rapiscan Systems name. Its products include baggage and parcel inspection, cargo and vehicle inspection, hold baggage screening, and people screening products to search for weapons, explosives, drugs and other contraband, as well as for the verification of cargo manifests for monitoring the export and import of controlled materials. This division also offers various turn-key security screening solutions under the S2 trade name. The Healthcare division provides patient monitoring, diagnostic cardiology, and anesthesia delivery and ventilation systems under the Spacelabs name that are used in critical care, emergency, and perioperative areas within hospitals, as well as physician's offices, medical clinics, and ambulatory surgery centers.

The Optoelectronics and Manufacturing division offers optoelectronic devices for the aerospace and defense, avionics, medical imaging and diagnostic, renewable energy, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction and homeland security markets under the OSI Optoelectronics name; and electronics manufacturing services to original equipment manufacturers under the OSI Electronics name. This division also provides laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan name; blood pressure cuffs and unifusors under the Statcorp Medical name; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode trade name. The company was founded in 1987 and its headquarters is in Hawthorne, California.

Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/20/2012.

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.

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