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Looking for the best small cap stocks to buy now? Consider the following 18 ideas that offer great blend of value and EPS growth.
As the market continues to remain expensive, and we are looking at the prospect of a correction or an economic recession, it is wise to insist on cheap valuations. This creates a margin of safety and provides a cushion if the stock market does indeed sell off.
Learn more about investing in small and micro cap stocks
At the same time, you want companies that run a strong franchise. A solid EPS growth is one such indicator that tends to turn up stocks of the businesses that are growing their business (or becoming more efficient by reducing expenses).
The following 18 small cap stocks have been selected to give you ideas with reasonable price to earnings ratio and price to book ratio, and a solid earnings per share growth in the past 5 years. Please note that this is just the first screen. Before you decide to invest, research these stocks further to make sure that the value proposition works out.
|Symbol||Company Name||Security Price||Market Capitalization||P/E (Last Year Actual)||Price/Book Ratio||% EPS Growth (5 Year Historical)|
|ACOR||Acorda Therapeutics Inc||10.92||$528.27M||5.11009||0.86321||12.7298|
|CCS||Century Communities Inc||24.55||$767.75M||8.03155||0.89339||40.45146|
|CMFN||CM Finance Inc||7.29||$99.37M||4.64968||0.63524||12.59338|
|CMLS||Cumulus Media Inc||17.99||$302.15M||0.68148||0.77508||99.12784|
|DPLO||Diplomat Pharmacy Inc||5.44||$402.91M||7.51389||0.86632||50.91007|
|FCBP||First Choice Bancorp||20.55||$244.96M||10.34158||0.98745||13.63847|
|HNNA||Hennessy Advisors Inc||9.15||$72.05M||4.33333||0.97734||36.37538|
|AMTB||Mercantil Bank Holding Corp||16.36||$690.06M||11.75||0.67598||13.56416|
|MESA||Mesa Air Group Inc||8.62||$202.46M||6.41667||0.51235||17.17934|
|MRCC||Monroe Capital Corp||12.07||$249.02M||7.75796||0.94058||29.27906|
|ZEUS||Olympic Steel Inc||15.59||$174.26M||5.3661||0.56763||33.71945|
|PRTY||Party City Holdco Inc||7.68||$763.03M||5.06211||0.73134||111.51272|
|RBBN||Ribbon Communications Inc||5.24||$557.58M||9||0.94457||13.09264|
|SND||Smart Sand Inc||4.3||$162.29M||4.51111||0.77519||15.89562|
|UBNK||United Financial Bancorp Inc||13.42||$675.55M||11.71053||0.93295||16.72353|
|WHF||WhiteHorse Finance Inc||14.51||$296.48M||11.85703||0.94032||17.04695|
Of these names, CCS is already on the VSG watchlist. However, with the prospect of a real estate slowdown, you have to finely balance the undervaluation with your economic outlook and consider how long you are willing to wait for the value to realize. I will be looking at the other stocks in the name carefully in the next few days. VSG Membership allows you to see further analysis of the stocks we buy.
Which of these names do you find interesting? Let us know in the comments below.