You don't need the investing acumen of Warren Buffett or the riches of a trust fund baby to achieve financial success.

Since the stock market is your best hope for realizing your 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 stocks 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, an earnings surprise of 15% or more in the previous quarter, and forecasts for long-term earnings growth potential of at least 15%. We'll filter our findings through the collective investing wisdom of the 170,000 members in our Motley Fool CAPS community. If the best and brightest CAPS players think these stocks hold potential, 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
(out of 5)

Power-One (Nasdaq: PWER) $1.1 billion $0.40 vs. $0.23 26% ****
Trina Solar (NYSE: TSL) $1.7 billion $1.08 vs. $0.87 17% *
Zix (Nasdaq: ZIXI) $269 million $0.03 vs. $0.02 25% ****

Source: and Motley Fool CAPS.

Of course, this is not a list of stocks to buy -- just a starting point for more research. We need to look more closely at these companies to see whether analysts' faith in them is well-founded. Still, since the CAPS community's helping us out, their favorite selections might be a good place to begin.

An alternative opportunity
As the second-largest provider of power inverters, Power-One has carved out a niche for itself in the solar power market, with third-quarter sales in the division growing by more than seven times the year-ago revenues.

A solar power inverter takes the DC power produced by photovoltaic panels and converts it to AC power so that it can feed it into the grid. The company's products have proved popular enough that it has built new manufacturing facilities close to where leading solar shops like First Solar (Nasdaq: FSLR) and Suntech Power are based. The problem for Power-One is that competition is intense, and it admits that price erosion will be a constant feature of its operations, along with product obsolescence. The upside is that the inputs for making the inverters are also dropping so its expenses are lower, too.

CAPS All-Star IgnorantFool77 says Power-One's ability to maintain its leadership position in the space positions it well for companies driving to maintain a "green" facade:

Let's talk about the business for a moment. It's focus is on energy conversion and energy management. It specifically is a leader in the area of energy efficient inverters. There is a race on right now across most industries to demonstrate their ability to 'go green,' and become more energy efficient. This … not only looks good to the press it looks good on the bottom line. They are the second largest manufacturer of solar energy inverters, and also make wind inverters.

I'll drink to that
But the solar sector hasn't been kind to Trina Solar. Despite beating revenue and earnings estimates in its quarterly report, as well as raising guidance, it was still knocked back by the market.

Solar stocks in general have been burned over the past month, with the CAPS Solar Power sector falling 11% over the past 30 days while the S&P 500 was essentially flat. You'd think there was a lack of good news, but ReneSola (NYSE: SOL) also had a better-than-expected third quarter. So what gives?

Disappointing results from Suntech and Sunpower keep analysts worrying that the industry won't be able to find the demand its production levels suggests is out there. That may also be the reason Trina might decide to go looking in the wind power business to grow its top line more. CAPS member jvaskonen thinks the saving grace for Trina (and presumably a number of other solar players) will be China's continuing investment in the industry: "I like this stock because China is putting a lot more effort into developing it's renewable portfolio. And I think it's currently on sale again."

Shine a light on the Trina Solar CAPS page telling us whether you think the stock will wilt further or regain its footing and brightly lead the way back up.

Man the ramparts
Zix can only benefit from the heightened awareness about security issues that the WikiLeaks brouhaha has engendered. Third-quarter sales were already up a robust 15%, but with its stock up 143% in 2010, it wasn't enough to counteract the pricey valuation the market's assigning to it.

But this is a hot growth story in an increasingly important sector, so we might expect stocks to carry a premium here, particularly when big guns like Cisco (Nasdaq: CSCO), McAfee, and EMC (NYSE: EMC) are scooping up rivals. It's enough to warrant believing it could provide someone with a nice tuck-in acquisition.

CAPS member SIO394 says the need for Zix's services has never been greater: "We all need to have sensitive information protected, it's our right of privacy and this company is protecting our health information. I like it in the short term."

You can add the company's stock to the Fool's free portfolio tracker to keep an eye on what other signals it's sending.

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!

First Solar and Suntech Power Holdings are Motley Fool Rule Breakers picks. The Fool has written calls (Bull Call Spread) on Cisco Systems. The Fool owns shares of Power-One. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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