April has been generally good for the stocks. Since 2001, April has been the best month for stocks, with an average 2.7% return in the month, and the market up 8 out of the last 11 years in April. We have also entered April with strong positive momentum in the market and as the tax refunds come in, it is very likely that the investors will be in the mood to keep buying.
Keep an eye on the following 6 small cap stocks. These companies have kept a good 5 yr average EPS growth, are available at great valuations and have a PEG ratio below 1. A number of these stocks are from the tech sector, which is not surprising, but there is a good variety.
- Amtech Systems (ASYS): Amtech designs and manufactures equipment used for making wafers for solar and semiconductor industries. The company is cash rich with $55 million on the books which is significant for a company with $73 million in market value. There is no debt and the stock trades at 4.4 trailing P/E and a book multiple of 0.67
- VSE Corp (VSEC): VSE provides IT and other technological services and support to Department of Defense and other Federal government agencies. The stock of the $121 million market value company appears cheap at 5.9 P/E and 0.85 price to book. The company does have significant debt. It pays 1.2% dividend.
- Full House Resorts Inc (FLL): Full House Resorts, Inc. owns, develops, and manages gaming facilities in the United States. It operates casinos and resorts in Nevada, Michigan, Indiana and New Mexico. The company generates a solid 23% ROE and has a forward P/E ratio of 12.
- Rubicon Technology Inc (RBCN): Rubicon Technology, Inc. develops, manufactures, and sells monocrystalline sapphire and other crystalline products for light-emitting diodes (LED), radio frequency integrated circuits (RFICs), blue laser diodes, optoelectronics, and other optical applications. The stock sold off when Q4 revenues and earnings missed the estimates and the company guided a weak Q1 due to excess inventory in the LED market. If you are willing to wait for the over supply to work off, likely in the 2nd half of this year, you can currently buy the stock below book value. There is no debt and the company has sufficient cash to navigate the sales slump.
- Willis Lease Finance Corp (WLFC): Willis Lease Finance Corporation, together its subsidiaries, provides aviation services. It leases spare commercial aircraft engines and aircraft to commercial airlines, aircraft engine manufacturers, and air cargo carriers, as well as maintenance, repair, and overhaul facilities worldwide. This is a capital intensive industry and the company has significant debt on the books, supported by tangible assets. The stock is currently priced at 58% of the book value and can be an attractive asset play.
- Power-One Inc (PWER): Power-One, Inc. engages in the design, manufacture, sale, and service of power supply products for the renewable energy (RE), servers, storage and networking, telecommunications, industrials, and network power systems industries worldwide. The $511 million market value company has $205 million in cash and sports a forward P/E of 6.25. The company has a strong balance sheet and should be on your watch list despite the current problems in the solar industry.
Some of these stocks will be added to the Value Stock Guide Premium Watch List so I can research these further to see if any of these are good stocks to buy for the VSG portfolio and the premium members. As usual, do your research and let me know in the comments below if you have any questions.