Hawkins, NCI: Top 5 Small-Cap Stocks

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

Hawkins (HWKN) 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 cash reserves, evident in its quick ratio of 2.8. We give the company a financial strength score of 8.9 out of 10, higher than the "buy"-list average.

The stock: Hawkins has increased 64% this year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 10, a discount to the market and chemical makers. Shares offer a 2.2% dividend yield.

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

The numbers: Second-quarter net income 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 8% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 9, a discount to the market and other insurers. The company doesn't pay dividends.

The First of Long Island (FLIC) is a commercial bank in New York.

The numbers: Second-quarter profit increased 3% to $3.4 million, or 47 cents a share, as revenue grew 13% to $18 million. Its gross margin was little changed at 73% and its operating margin declined from 35% to 34%. The company is adequately capitalized, evident in its risk-based capital ratio of 17%. A debt-to-equity ratio of 1.5 indicates higher-than-ideal leverage.

The stock: The First of Long Island has increased 11% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 14, a discount to the market and other regional banks. The shares offer a 2.7% dividend yield.

NCI (NCIT) provides technology consulting to government agencies.

The numbers: Second-quarter profit rose 26% to $5.1 million, or 37 cents a share, as revenue advanced 13% to $109 million. Its gross margin declined from 14% to 13% and its operating margin rose from 8% to 9%. A quick ratio of 1.6 demonstrates ample liquidity and a debt-to-equity ratio of 0.2 indicates modest leverage.

The stock: NCI is flat this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 22, a premium to the market, but a discount to other tech consultants. The company doesn't pay dividends.

Village Super Market (VLGEA) owns a ShopRite supermarket chain.

The numbers: Fiscal third-quarter profit increased 25% to $6.3 million, or 47 cents a share, as revenue increased 7% to $293 million. Its gross margin declined from 28% to 27%, but its operating margin rose from 3% to 4%. Same store sales, an important gauge of retail improvement, jumped 7%. The company has a modest $36 million debt load and $47 million of cash, which works out to a quick ratio of 0.8 and a debt-to-equity ratio of 0.2.

The stock: Village Super Market has climbed 3% this year, lagging behind major U.S indices. The stock trades at a price-to-earnings ratio of 17, a discount to the market and food retailers. The shares offer a 3.1% dividend yield.

-- Reported by Jake Lynch in Boston.