Hawkins, NCI: Top 5 Small-Cap Stocks

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BOSTON (TheStreet) -- The following companies have market values of $50 million to $500 million and receive "buy" ratings from our proprietary quantitative model, which considers more than 60 factors. They are ordered by their potential to appreciate, starting with the company with the best growth prospects.

Hawkins(HWKN Quote) makes specialty chemicals.

The numbers: Fiscal first-quarter profit increased 24% to $6.1 million, or 58 cents a share, as revenue grew 18% to $74 million. Its gross margin remained steady at 24% and its operating margin advanced from 12% to 13%. Hawkins has an ideal financial position, with no debt and ample liquidity, evident in its quick ratio of 2.8.

The stock: Hawkins has increased 55% this year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 10, a discount to the market and chemicals peers. Shares pay a 2.5% dividend yield.

American Physicians Service Group(AMPH Quote) provides medical liability insurance and investment management services.

The numbers: Second-quarter profit decreased 20% to $4.9 million, or 70 cents a share, as revenue declined 13% to $20 million. Its gross margin fell from 58% to 44% and its operating margin dropped from 51% to 38%. The company has an ideal financial position, with $46 million of cash, compared to $6.5 million of debt. A debt-to-equity ratio of 0.1 indicates modest leverage.

The stock: American Physicians Service Group is up 9% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 9, a discount to the market and insurance peers. The company doesn't pay dividends.