Although Layne Christensen (NASDAQ:LAYN) profits from the dwindling global supply of fresh water, don't get the impression that it's the front for some kind of villain from a James Bond film. This legitimate, Kansas-based company operates on four continents, priding itself as the world leader in groundwater services. It diversifies through activities in the mineral exploration drilling industry, geoconstruction, and energy services.

Let me tell you why I'm having trouble containing myself over this stock. Layne currently has a market capitalization of less than $300 million, compared to a recent book value of around $450 million.

These two figures should interest you for a couple of reasons. Unlike industry titans like Fluor (NYSE:FLR), Jacobs Engineering Group (NYSE:JEC), and Quanta Services (NYSE:PWR), small-cap stocks have traditionally been able to achieve higher risk-adjusted returns -- perhaps because their risks are difficult to quantify using conventional asset pricing models. Furthermore, countless tests of efficient market hypotheses have produced evidence that regardless of firm size, companies with book values in excess of their market values are associated with having abnormally high risk-adjusted returns; so already, Layne is doubly notable.

But there's more. Its stock is trading around six times its forward earnings per share, and it has a PEG ratio of 0.42 based on five-year expected growth.

Layne also exhibits anomalous behavior regarding earnings surprises. It has reported positive earnings surprises for 13 of its last 17 quarters. However, last quarter was an exception. It missed estimates by $0.03, and once management expressed its cloudy outlook for the mineral exploration business and increasing price competition within parts of its water infrastructure segment, owners lost their collective cool; shares sold down 26% after a full day of trading.

While its earnings failed to beat the Street this past quarter, and its stock price faltered following the announcement, Layne still reported record revenue of $264.5 million. It was also able to keep $0.63 per share -- up 17.4% and 6.8%, respectively, over last year's same quarter. Furthermore, long-term investors are now presented with an enticing buying opportunity for a company that is fundamentally unchanged.

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