Top Five Small-Cap Stocks: PetMed, Aaon

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BOSTON (TheStreet) -- The following companies have market capitalizations between $50 million and $500 million and "buy"-ratings from our proprietary quantitative model, which considers more than 60 factors. They are ordered by their potential to gain.

PetMed Express(PETS Quote) sells medication and health products for dogs, cats and horses.

The numbers: Fiscal first-quarter revenue increased 13% to $77 million. Net income grew 22% to $8.1 million and earnings per share climbed 29% to 36 cents, helped by a lower share count. Its operating margin increased from 14% to 16% and its net margin passed 10%. The company has no debt and a quick ratio of 3.7, which indicates outstanding liquidity.

The stock: PetMed is up 3% this year, underperforming the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a fair price-to-earnings ratio of 17 and doesn't pay dividends.

Applied Signal Technology(APSG Quote) provides intelligence, surveillance and reconnaissance solutions for the defense and homeland security markets.

The numbers: Fiscal second-quarter revenue increased 18% to $54 million as earnings doubled to $4 million, or 31 cents per share. Its operating margin climbed to 12% and its net margin rose to 8%. The company has an ideal financial position, with just $4 million of debt and $55 million of cash, amounting to a quick ratio of 4.6 and a debt-to-equity ratio just above zero.

The stock: Applied Signal Technology has advanced 32% this year, outperforming major U.S. indices. The stock trades at an expensive price-to-earnings ratio of 25 and offers a lackluster 2.1% dividend yield.