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Small-cap stocks are often associated with a lot of risk -- but they can occasionally offer some of the best rewards. These stocks, which traditionally have market values of up to $2 billion, have a tendency to fly under Wall Street's radar, meaning a hidden gem with incredible growth prospects, or a deeply discounted value stock, can be found with some careful research. 

With this in mind, we asked five of our Fool contributors to offer one small-cap stock idea each that you should consider adding to your portfolio in October. Here's what they had to say.

Drilling for small-cap value

Sean Williams: There are more than 1,500 stocks trading on reputable U.S. exchanges that fall under the traditional definition of "small-cap stock." However, none looks more attractive this October than offshore contract driller Noble Corporation (NEBLQ).

For the year, shares of Noble are down about 46%, with profits reeling on account of substantially lower crude oil prices and weaker demand for offshore drilling contracts. In fact, over the past three years Noble has lost more than 80% of its value. Yet it's my belief that this $1.4 billion company could be poised for a significant long-term rebound.

For starters, Noble is working with one of the youngest fleets in offshore drilling. Noble's drilling fleet averages about 10 years in age, meaning it typically commands higher average dayrates, and its rigs are more efficient producers than older rigs. Even in a slower drilling environment, newer rigs are going to be sought after by integrated oil and gas companies for drilling purposes, which places Noble in a prime position to succeed as crude market fundamentals stabilize.

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Second, Noble isn't in nearly as dire financial shape as shale-based drillers have been. Despite its $4.1 billion in long-term debt, just $752 million is due between 2017 and 2019, with half of its debt due in 2025 or later. Noble still has $823 million in cash and cash equivalents as of the latest quarter, and it'll likely generate around $400 million in free cash flow in each of the next two years despite struggling in the adjusted EPS column.

Third, you have to like what Noble is doing in the cost-cutting column. Lower demand means lower expenses, but it's also worked to repay debt and reduce its capital expenditures in 2017 to a sixth of what they averaged between 2011 and 2014.

Last, a bet on Noble is a bet on the long-term rebound in crude oil prices. Noble can tread water with oil hovering in the mid-$40s, and has the balance sheet to weather any potential "storms." When crude prices do eventually rebound, Noble has the potential to significantly outperform its peers.

Focus on the long term

Steve Symington: With CalAmp (CAMP -4.91%) down nearly 30% year to date as of this writing, on the heels of its weaker-than-expected quarterly report earlier this week, I think now is a great time for long-term investors to open or add to a position in the machine-to-machine communications specialist. 

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To be fair, the stock also fell hard this past April as CalAmp revealed that key satellite customer EchoStar (SATS 0.94%) was consolidating its supplier base, discontinuing purchases from the company in August in the process. Because EchoStar was responsible for essentially all revenue under CalAmp's satellite segment, CalAmp shuttered the segment at the end of last quarter.

But I also think CalAmp was right by insisting it "does not believe that the loss of EchoStar as a customer will have a material adverse effect on its overall business." After all, though CalAmp certainly wasn't complaining about the modest contributions to profitability the satellite segment offered, it still only comprised less than 10% of CalAmp's overall sales.

Meanwhile, revenue from CalAmp's core Wireless Datacom segment climbed a seemingly healthy 35.6% year over year last quarter, to $83.8 million. That included $27.9 million from CalAmp's recently completed acquisition of vehicle recovery specialist LoJack, the integration of which has gone more smoothly than anticipated, leaving it ahead of schedule and realizing earlier-than-expected revenue synergies. The performance of wireless datacom overall was slightly below CalAmp's expectations last quarter due to a difficult macroeconomic environment in North America that held back sales of mobile resource management (MRM) products to certain key customers.

CalAmp also noted that these concerns are "very near-term" in nature, as it's seeing signs of "firming of demand" since then and believes MRM product revenue should begin to improve in the coming quarters. In the end, given the compelling operating leverage CalAmp should be able to demonstrate as it continues to grow its revenue base, I think opportunistic investors willing to look past these near-term headwinds and the loss of a non-key segment should be handsomely rewarded as CalAmp's real long-term story continues to play out.

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This small-cap biopharma is gaining momentum

George Budwell: Amarin Corp. (AMRN 2.37%) is one small-cap biophama that has my full attention right now because of its ginormous growth prospects and arguably dirt cheap valuation. The lowdown is that the sales of Amarin's highly refined fish oil pill Vascepa have been picking up in a big way in recent quarters, presumably due to an uptick in off-label prescriptions for the drug. Specifically, Amarin recognized $32.8 million in net product revenue from Vascepa in the second quarter of this year, a whopping 85% increase year over year. 

Vascepa's commercial momentum is only expected to grow even stronger going forward, with sales forecast to rise by another 43% in 2017. This means that Amarin's shares seem to be trading at a steep discount relative to Vascepa's rapidly growing share of the multibillion-dollar heart disease market. More to the point, Amarin's shares appear to be trading at less than twice the company's projected 2019 revenue -- that is, based on Vascepa's current growth trajectory and overall market opportunity. 

The catch, though, is that Vascepa is in the midst of a large cardiovascular outcomes trial that could scuttle its commercial momentum if things don't go as planned. Fortunately, the trial is still on track following the first pre-planned interim peek at the data by an independent data-monitoring committee. Although the second interim analysis -- which should take place in the first half of 2017 -- may say otherwise, this key risk factor is off the table for at least the next four to six months. As such, I expect this stock to continue picking up steam heading into the tail end of 2016. 

Hit the road and profit

Dan Caplinger: With a market capitalization of about $4.5 billion, Thor Industries (THO -1.28%) is at the high end of what most investors would consider a small-cap stock. Yet even though the recreational vehicle specialist's shares have climbed enough to push its market cap toward mid-cap territory, Thor is still behaving like an up-and-coming player in the RV market, challenging for dominance in the fast-growing industry.

Image source: Thor Industries.

Thor Industries has seen a big upsurge in demand for motorized vehicles and travel trailers, with the drop in gasoline prices and increases in discretionary income helping to power sales and keep interest levels high among potential buyers. Moreover, Thor's recent acquisition of industry peer Jayco helped flesh out the company's product offerings, and particularly improved Thor's ability to deliver lower-priced products that appeal to entry-level customers. Looking forward, Thor sees high demand continuing, pointing to satisfaction among its dealer network with the products that the company has put on the market. A brand-new lineup of vehicles and trailers for 2017 is also driving excitement. Even with the stock having climbed to all-time record highs on the positive results, Thor Industries still has room to rise if conditions in the RV industry stay strong in the future.

A reliable dividend investment in a small cap?

Tyler Crowe: Typically, companies in the small-cap realm aren't well suited for income investment. Either the smaller size means that they are in growth mode and need the capital to reinvest in their business, or they aren't really big enough to generate the stable profits required to pay a dividend.

One exception to this rule is Holly Energy Partners (HEP). At just a little less than $2 billion in market capitalization, it's on the large side of the small-cap spectrum, but the company really punches above its weight when it comes to stability, and is a relatively reliable high-yield investment.

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Over the years, Holly Energy has displayed all the qualities you want in a stable, growing income investment: stable revenue and solid financial management. One hundred percent of its revenue is based on fee-structured contracts for moving and storing crude oil and refined petroleum products. This ensures a very predictable amount of cash coming in the door that allows management to pay a hefty dividend each quarter -- one that has increased every quarter since it held its IPO in 2004 -- without stretching the company too thin financially. It also helps that the company has elected to retain cash for investing in growth -- yes, that is surprisingly uncommon in the MLP world -- and maintain modest debt levels compared to many of its peers. With Holly Energy Partners' dividend yield of 6.9%, there aren't many small caps out there giving you such a reliable income investment.