Hey there, Fools. We're back again to help you identify some of the most attractive micro-cap stocks worthy of your investment dollars. Just as a reminder, we do this because:
- Underfollowed micro-cap companies offer great returns -- and sometimes even the best returns.
- Wall Street is covering fewer stocks than ever before, making now a great time to start looking for tiny treasures.
- Micro-cap stocks can burn if you don't do your homework, so we try to shed more light on the asset class for you.
Microscopic surgery
This column uses our Motley Fool CAPS community-intelligence database to turn up promising stocks. The system asks amateur and professional investors alike to rate stocks either "outperform" or "underperform." In turn, each investor is rated, as is each stock.
The end result is that while only huge companies like Apple have more than 15 or 20 analysts following them, CAPS harnesses the ideas of thousands to get at the long tail of the stock market with the same depth of coverage.
Drumroll, please ...
So without further ado, here are five CAPS stocks sporting a rating of four or five stars, that have market caps between $100 million and $200 million, and that four or fewer professional analysts are covering.
|
Company |
Market Cap (in millions) |
Number of CAPS Ratings |
Analysts |
Current Analyst Recommendations |
|---|---|---|---|---|
|
IntegraMed America |
$103 |
15 |
1 |
Strong Buy |
|
Hickory
Tech |
$123 |
27 |
0 |
N/A |
|
Amtech Systems |
$138 |
24 |
1 |
Strong Buy |
|
AmCOMP |
$152 |
32 |
4 |
Two Strong Buys, Two Buys |
|
Anika Therapeutics |
$168 |
152 |
3 |
Two Strong Buys, One Hold |
As always, don't view these stocks as hearty formal recommendations, but rather as appetizing starters for further analysis. Agreed?
Now that we have that settled, IntegraMed America and Amtech Systems might be a pair of small wonders worthy of your Foolish due diligence.
Fertility test
Our CAPS database is certainly a breeding ground for market-beating stock picks, but New York-based IntegraMed could very well be the most fertile pick of them all. Of the 15 players who've rated the fertility-center operator, each one is bullish.
IntegraMed is the leading provider of full fertility services, performing about 22% of all in vitro fertilization procedures in the United States. And best of all (for us investors), it's a business that seems to be growing, as well. Over the last three years, net income and operating cash flow have increased at a compounded rate of 54% and 28%, respectively. In the latest quarter, net income grew 65% over the prior period.
With the stock currently trading at a P/E of 25.6 and an EV/EBITDA ratio of less than 10, IntegraMed could offer some reasonable value.
CAPS All-Star shredlee gets productive:
Obscure fertility treatment play. Dominating a stagnant industry by providing patient money back financing and supplies to a network of the leading clinics. I like how they continue to gain market share while being so under followed, probably because they are such a small company.
Small solar supply
Amtech Systems, a supplier of production systems to solar-cell and semiconductor makers, is another stock in the long tail that piques the interest of our community. So far, only 21 players have rated Amtech, but just one is on the bearish side.
Our community likes the stock as a small way to play the rapid growth of solar power. Of course, Amtech's top-line average growth of 29% over the last two years, and 117% price return over the last one, suggests substantial leverage to the solar industry. In fact, Amtech recently received a major follow-on order from Chinese photovoltaic-cell producer Yingli Green Energy
With a P/E around 40, the stock isn't exactly cheap. But if you're super-bullish on solar, Amtech might be worth watching.
CAPS player linzee6394 makes a bold comparison:
This company's products and services will only be in more demand over the next decade as green power popularity grows, and if you're looking for another company to compare it to, I think of Intel
(NASDAQ:INTC) .
Their subsidiary, Tempress Systems Inc., announced earlier this month that they received an additional $17.4 million in orders for diffusion processing systems from the solar cell industry. That's huge.
Are we on the same micro-wavelength?
But, of course, the real question is whether you believe these companies are real micro-marvels, or just small shrimps waiting to get squished. Log on to CAPS and let us know how you feel.
It's absolutely free and, within seconds, you'll have access to thousands of potential stock ideas. Join now -- more teeny-tiny treasures await discovery.
