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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Small-Cap Growth Stocks With Zero Debt

Stocks in this article: ISSI NSP TRCR RUE DORM

MILLBURN, N.J. ( Stockpickr) -- I am always in search of growth stocks. I am also always seeking out stocks that have unique blends of financial metrics that line up to try to help whittle an investment edge -- either on the long or short side.

Recently, I decided to seek out some excellent growth candidates by taking a look at small-cap stocks with market capitalization below $1 billion that were members of the Russell 3000 Index (RUA). To achieve the growth characteristics of my search, I further screened out stocks with price-earnings-to-growth, or PEG, ratios that were less than 1. In other words, these stocks are selling at a discount to their earnings growth. I made sure to eliminate stocks that carried any debt.

>>7 Relative Strength Stocks to Beat the Market

I wanted to be contrarian and culled out stocks with high short interest ratios. In other words, I sought out small-cap growth stocks that many people were betting would fail.

Then I performed a fundamental review of these stocks to select those with business models that I felt were consistent with my economic outlook.

What I arrived at was a portfolio of five small-cap growth stocks with high short interest. Let's take a closer look.


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