Top 5 Small-Cap Stocks
Each business day, TheStreet.com Ratings compiles a list of the top five stocks in one of 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 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. Axsys Technologies (AXYS) designs and manufactures precision optical solutions (such as thermal imaging cameras, stabilized camera systems, motion control systems and scanning systems) for use by the U.S. government and high performance commercial markets in aerospace, defense, and other applications. Axsys also distributes precision ball bearings used in a variety of industrial and commercial applications. In the fourth quarter of 2007, the company recorded strong financial performance, with strong demand for both Axsys' traditional business and the recently acquired gyro-stabilized gimbal business helping generate revenues of $47.9 million, compared to $33.8 million in the fourth quarter of 2006. Sales increased 42.0% year over year to a record $47.9 million. The company reports that its backlog increased to a record $140.0 million, which is a 21.0% increase compared to the fourth quarter of 2006. This increase was due to strong demand for infrared cameras and lenses, gimbal systems and military-grade motion control systems. Looking ahead for full-year 2008, management now expects to generate sales in the range of $208 million to $212 million, up from the previously forecast $193 million to $197 million range. Management also expects diluted earnings per share to be in the range of $1.70 to $1.75, up from the previous guidance of $1.57 to $1.60. However, any significant reduction or delay in purchase of the company's products by the U.S. government could have an adverse effect on Axsys' financial performance, as the company derives a significant portion of its revenue from this source. CAM Commerce Solutions Inc. (CADA) provides a variety of software, hardware and other technical systems for retailers. Our buy rating, in place since February 2006, is based on positive investment measures such as the company's strong revenue growth, solid financial position and stock performance and its growth in net income. Powered by its strong earnings growth of 69.56% during the first quarter of 2008, this stock has surged by 63.8% over the past year. Revenues rose by 37.3% year over year in the first quarter. CAM Commerce Solutions has no debt to speak of, giving it a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Net income increased by 75% when compared to the same quarter one year prior. Finally, the company has demonstrated an impressive pattern of positive earnings per share (EPS) growth over the past two years. For example, EPS grew 69.56% in the first quarter of 2008. Looking forward, we feel that this trend should continue. Exactech (EXAC) develops, makes, markets, distributes and sells orthopedic implant devices, related surgical instrumentation, and biologic materials to hospitals and physicians in the U.S. and 27 other countries. The company produces products such as knee systems and other joint replacement implant products. Exactech's revenues are derived primarily from sales of its knee and hip joint replacement systems; however, revenues from the worldwide distribution of biologic materials have increased as a percentage of the company's total revenues.
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