Small-cap stocks can offer investors higher growth opportunities than larger alternatives, although this comes with added levels of risk. One way to mitigate that risk is to focus on small caps that have strong projected long-term growth on the horizon, along with 'Strong Buy' recommendations by analysts. Today we focused our screen on these sorts of stocks, and came up with a short, 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. We then looked for businesses that analysts rate as "Strong Buy" (mean recommendation < 2). We then looked for companies that are considered high-growth, with 5-year projected EPS growth above 25%. We did not screen out any sectors.
Do you think these small-cap stocks will trade at a higher valuation? Use our list to help with your own analysis.
1) Silicon Image, Inc. (SIMG)
| Sector: | Technology |
| Industry: | Semiconductor - Broad Line |
| Market Cap: | $332.17M |
| Beta: | 1.55 |
Silicon Image, Inc. has a Analysts' Rating of 1.50, and a 5-Year Projected Earnings Per Share Growth Rate of 40.00%. The short interest was 4.31% as of 06/29/2012. Silicon Image, Inc. provides wireless and wired connectivity solutions that enable the distribution and presentation of high-definition (HD) content for mobile, consumer electronics (CE), and personal computer (PC) markets. The company delivers its technology via semiconductor and intellectual property products and services. It offers high-definition multimedia interface (HDMI) and mobile high-definition link (MHL) transmitters for mobile devices, such as smartphones and tablets; and MHL-to-HDMI bridges for docking stations and adapters connecting MHL mobile products with HDMI-enabled digital televisions (DTVs) and displays.
2) Team Inc. (TISI)
| Sector: | Services |
| Industry: | Business Services |
| Market Cap: | $584.96M |
| Beta: | 1.31 |
Team Inc. has a Analysts' Rating of 1.50, and a 5-Year Projected Earnings Per Share Growth Rate of 27.53%. The short interest was 3.67% as of 06/29/2012. Team, Inc. provides specialty maintenance and construction services for maintaining high temperature and high pressure piping systems and vessels that are utilized in heavy industries. It offers inspection and assessment services, such as inspection and evaluation of piping, piping components, and equipment; field heat treating services, including electric resistance and gas-fired combustion; leak repair services comprising on-stream repairs of leaks in pipes, valves, flanges, and other parts of piping systems and related equipment; and fugitive volatile organic chemical emission leak detection services consisting of identification, monitoring, data management, and reporting. The company also provides hot tapping services, such as hot tapping, Line-stop, and Freeze-stop services; field machining services, including the use of portable machining equipment to repair or modify machinery, equipment, vessels, and piping systems, as well as flange facing, pipe cutting, line boring, journal turning, drilling, and milling services; and technical bolting services comprising the use of hydraulic or pneumatic equipment with bolt tightening techniques for leak-free connections, plant maintenance, and expansion projects, as well as bolt disassembly and hot bolting services.
3) OSI Systems, Inc. (OSIS)
| Sector: | Technology |
| Industry: | Semiconductor Equipment & Materials |
| Market Cap: | $1.21B |
| Beta: | 0.99 |
OSI Systems, Inc. has a Analysts' Rating of 1.50, and a 5-Year Projected Earnings Per Share Growth Rate of 37.00%. The short interest was 3.97% as of 06/29/2012. 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.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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