Achieving financial success doesn't require you to have the investing acumen of Warren Buffett or be a trust-fund baby to start securing your financial future.

Since the stock market is our best hope for realizing our dreams, start investing today by putting away small sums of money every month. Then seek out undervalued small-cap stocks for your greatest returns. I like these because they offer opportunities for growth while still being mostly overlooked by the big investors.

To find these future giants, we'll screen for stocks with market values less than $3 billion, that had earnings of 15% or more last quarter, and are forecast to have long-term earnings growth potential of at least 15%. Then we'll filter our findings through the collective investing wisdom of the 160,000 members in our Motley Fool CAPS community. If the best and brightest CAPS players think these stocks hold potential, then we ought to take notice, too.

Here are some of the stocks this simple screen found:


Market Cap

EPS Surprise

Avg. Analyst 5-Year EPS Est.

CAPS Rating

MercadoLibre (Nasdaq: MELI)

$2.3 billion

$0.22 vs. $0.18



Microvision (Nasdaq: MVIS)

$262 million

($0.10) vs. ($0.12)



POZEN (Nasdaq: POZN)

$248 million

($0.10) vs. ($0.19)



Source: and Motley Fool CAPS.

Of course, this is not a list of stocks to buy. This is a starting point for more research. We need to look more closely at these companies to see if analysts' faith in them is well-founded, but we've got the CAPS community helping us here, and we'd do well to begin with their favorites.

An alternative opportunity
An investment in MercadoLibre is just as much a bet on growth in the Brazilian economy. Although the Latin American e-commerce platform is based in Argentina, it derives almost 43% of its revenues from Brazil. The country is expected to enjoy China-like growth this year, with analysts expect it to expand at a rate of 7.5% this year. The service, which operates like eBay (Nasdaq: EBAY), should see better results itself. With consumers feeling better and having more cash to spend, there's a good chance they'll surf MercadoLibre's sellers for good deals.

As CAPS member JPNot points out, eBay is a shareholder in MercadoLibre and will also benefit from its expansion plans:

Based in Argentina, MELI is considered the Ebay of Latin America. And in fact, Ebay owns about 18% of MELI. It recently expanded to Portugal and growth has been robust. Company has strong fundamentals with a ROE of 32%

Got my eye on you
Looking at Microvision's most recent earnings report, a superficial read of the micro-projector maker's results would lead you to believe that business was faltering. Revenues were down, losses widened, and it used more cash for operations than a year ago. But the company is in transition, switching from one dependent upon contract revenues to a seller of a hot new product.

We knew it had upside surprise potential as it signed up a super-secret consumer electronics company to buy $8.5 million worth of projectors, but with backlog jumping to almost $17 million (a 2600% increase), CAPS member manhattanbanker sees Microvision becoming a takeover target:

from a technology standpoint, mvis has built a formidable "moat" around themselves with the strongest patent portfolio in their space-because of this, mvis may be a possible takeover target sooner than later

There's been some fanciful speculation it might be Microsoft or Apple, but I'd wager Texas Instruments (NYSE: TXN) or 3M (NYSE: MMM) would be more interested since they're already competing against Microvision.

A case for heartburn
Pozen is another company with a potential blockbuster product on its hands, though it's a pharmaceutical, not a projector. It got the nod from the FDA to market Vimovo, a treatment for arthritis and gastric ulcers. AstraZeneca (NYSE: AZN) will launch the drug later this year, but it paid Pozen $20 million for the approval milestone. With 25 worldwide marketing applications submitted, AstraZeneca will pay Pozen another $25 million when the first one is approved.

Analysts see Vimovo as having huge potential, possibly generating as much as $500 million in revenues in the U.S. alone. With Pozen entitled to a 10% royalty on those sales, it's little wonder 80% of the CAPS members rating the pharmaceutical believe it will outperform the broad market averages.

Pozen's stock actually trades for a third less than what it did before Vimovo was approved, and with most of those payments not coming till later this year, and not factored into earnings estimates, I think there's some big movement up possible here. I've marked it to outperform, but you can add your own opinion on the Pozen CAPS page.

Foolish final thoughts
Stock investing is not brain surgery. Finding good, undervalued companies is not as difficult as the professionals want you to think. You just have to commit to starting now, and do so regularly. Now's the time to begin!

3M and Microsoft are Motley Fool Inside Value picks. Mercadolibre is a Motley Fool Rule Breakers recommendation. Apple and eBay are Motley Fool Stock Advisor selections. The Fool owns shares of Microsoft. Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.