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

Small sums of money invested monthly in undervalued small-cap stocks offer hope for your greatest returns. They offer the best growth opportunities for growth because they're mostly ignored by the big investors.

Below we screen for stocks under $3 billion in market cap, offering earnings surprises of 15% or more in the previous quarter, with long-term earnings growth forecast to be at least 15%. We'll then filter our findings through the collective investing wisdom of the 170,000 members in our Motley Fool CAPS community.

Here are some of the stocks this simple screen found:


Market Cap

EPS Actual vs. Estimate

Avg. Analyst 5-Year 
EPS Estimate

CAPS Rating 
(out of 5)

(Nasdaq: CSTR)

$1.7 billion

$0.46 vs. $0.22



(Nasdaq: SQNM)

$818 million

($0.13) vs. ($0.19)



Wonder Auto Technology
(Nasdaq: WATG)

$184 million

$0.35 vs. $0.23



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.

An alternative opportunity
Wait a second! Wasn't Coinstar supposed to be dead? Wasn't the DVD dead? Netflix (Nasdaq: NFLX), which itself was seen as tenuously clinging to life in the face of streaming video from (Nasdaq: AMZN), was going to squash the Redbox kiosk owner. Blockbuster's demise was all the evidence we needed that the physical model was broken.

Well, apparently like Mark Twain, the rumor of Coinstar's death has been greatly exaggerated. Revenues surged 31% in the latest quarter, and although operating expenses ate in to profits, volume overcame the dead weight. Particularly in light of Blockbuster's situation, both Netflix and Coinstar are faring quite well, thank you.

For me, I've never really bought into the argument of those two as rivals; instead I viewed their services as complements to each other. I have a Netflix subscription, but I also regularly visit Redbox to fill in the blanks on movies I want to see. The two services sustain each other, not destroy them. And for CAPS All-Star Chemdawg, the ubiquity of their kiosks doesn't hurt either: "red box is more popular than you would think...good product placement doesn't hurt either"

Follow this movie star's career by adding the stock to your watchlist, then head over on the Coinstar CAPS page and send it a fan letter.

Testing, testing
Speaking of dead, look who's back from the other side. Sequenom shot higher after reporting that its once heroic but then maligned Downs syndrome test has completed testing samples in a study. As the Fool's Brian Orelli points out, the biotech didn't give an indication of how the results went just that the tests were done. Both Elan (NYSE: ELN) and Biogen Idec suffered major setbacks after Tysabri looked good to go, so don't go getting the bubbly out to celebrate Sequenom's resurrection just yet.

While it also posted some good earnings results, it's unlikely that drove the price since the future of the company really hinges one what happens with the SensiGene Trisomy 21 test. At the least it's the major catalyst for it.

But let's give credit where it's due: Sequenom isn't a one trick pony (though the T21 test is a Belgian horse among Shetlands), and even as the tests were completed early, another test for macular degeneration moved closer to a launch later this year.

Some 91% of the nearly 700 CAPS members rating the biotech see it beating the Street going forward, no doubt many like perinatal who thinks Sequenom's will will find a way: "Sequenom will eventually figure out a way to perform non-invasive testing for Down syndrome."

Add Sequenom to the Fool's free portfolio tracker to keep an eye on whether this is its second coming or it's a zombie which doesn't know it's dead yet.

Man the ramparts
It's a wonder Wonder Auto Technology is still around, even though the Nasdaq exchange halted trading on the stock until it gets additional, unspecified information from the company. In March, the Chinese auto parts company announced it was restating its earnings going back to 2008 because it relied upon customer usage reports to time revenue recognition that didn't conform to accounting standards. Whoops.

Yet even before then, Wonder, SORL Auto Parts, and China Automotive Systems (Nasdaq: CAAS) were in a rout after China eliminated the tax breaks buyers of small cars enjoyed while reimposing a 10% tax. Damping demand for cars can be a real downer on an auto stock.

Although Wall Street remains exceptionally bullish on Wonder and the CAPS community itself falls heavily on the side of its being able to jump-start its growth again, it will take satisfying the Nasdaq first and then having its auditor uncook the books for all that to be realized.

Drive on over to the Wonder Auto Technology CAPS page and tell us if you think it's going to remain stuck in the breakdown lane.


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!