Top Five Small-Cap Stocks

Each weekday, TheStreet.com Ratings compiles a list of the top five stocks in five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- and publishes these lists in the Ratings section of our Web site.

This list, updated daily, is based on data from the close of the previous trading session. Today, small-cap stocks are in the spotlight. These are stocks of companies that have market capitalizations of between $50 million and $500 million that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 60 factors.

The stocks must also be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. They are ordered by their potential to appreciate.

Note that no provision is made for off-balance-sheet assets such as unrealized appreciation/depreciation of investments, market value of real estate or contingent liabilities that might affect book value. This could be material for some companies with large underfunded pension plans.

Today begins with CAM Commerce Solutions(CADA Quote), which engages in the design, development, marketing, installation and servicing of integrated retailing and payment processing for brick-and-mortar and e-commerce businesses. It has been rated a buy since September 2005.

The company's earnings per share improved by 87.5% in the third quarter of 2007 compared with the same period last year, and it has no debt to speak of. CAM Commerce also saw third-quarter revenue increase by 25.5% over a year ago. Powered by its strong earnings growth and other important driving factors, this stock has surged by 74.8% over the past year.

Naturally, any stock can fall in a major bear market. However, in almost any other environment, this stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year. Although the company may harbor some minor weaknesses, they are unlikely to have a significant impact on results.