Marshall said despite the year-to-date bull run in small-cap stocks, many names are still in secular growth trends, thus deserving higher multiples.
One of his favorite picks is Trinity Industries (TRN), which is up over 40% this year. Marshall said the company has a good backlog of business and has yet to hit its peak.
Another name he likes is KapStone Paper and Packaging
(KS), which is up a whopping 140% in 2013.
Marshall said he likes to find industries -- not just stocks -- that have gone through long periods of consolidation, such as the paper and packaging business. He added that KS has strong pricing power, good management and is a potential acquisition target.
Shoe Carnival (SCVL) is also a top pick. Marshall says there could be 800 total stores in a few years, up from the 300 current locations. He concluded the company has solid growth in an industry with little growth.His last pick was Zale Corp. (ZLC), which is up over 250% year-to-date in the midst of a massive turnaround story. While the move higher seems excessive, Marshall insisted it was just the beginning and that the stock should have plenty more room to the upside as margins drastically improve and earnings per share increase. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell