NCI, Monro Muffler: Top 5 Small-Cap Stocks

Monro Muffler, NCI and PetMed Express have "buy" ratings from TheStreet.com.
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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're ordered by their potential to rise, starting with the stock with most likely to gain.

Monro Muffler Brake

(MNRO) - Get Report

repairs cars and sells tires.

The numbers

: Fiscal first-quarter net income jumped 21% to $9.4 million, or 46 cents a share, as revenue increased 6% to $128 million. Its operating margin rose from 12% to 13% and its net margin inched past 7%. Monro has a weak cash position, with just $3 million of reserves. A debt-to-equity ratio of 0.5 demonstrates conservative leverage.

The stock

: Monro is down 1% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 20, a slight premium to the market, and offers a 1.1% dividend yield, less than the average of S&P 500 companies. Monro is benefitting as budget-conscious consumers fix their cars instead of buying new ones.

PetMed Express

(PETS) - Get Report

sells medications and health products for dogs, cats and horses.

The numbers

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

The stock

: PetMed is up 4% this year, underperforming major U.S. indices. The stock trades at a fair price-to-earnings ratio of 17, but the company doesn't consistently pay dividends.

NCI

(NCIT)

, a technology consulting firm, advises government agencies on issues such as cybersecurity and computer networking.

The numbers

: Second-quarter net income rose 26% to $5.1 million, or 37 cents, as revenue advanced 13% to $109 million. Its operating margin rose to 8% and its net margin rose from 4% to 5%. A quick ratio of 1.6 demonstrates NCI's ample liquidity. And a debt-to-equity ratio of 0.2 indicates modest leverage.

The stock

: NCI shares are flat this year, underperforming major U.S. indices. The stock trades at an expensive price-to-earnings ratio of 21 and the company doesn't pay dividends. NCI's services will be in demand as the federal government tries to trim spending.

Bio-Reference Laboratories

(BRLI)

provides testing services in the New York area.

The numbers

: Fiscal second-quarter net income grew 35% to $4.6 million, or 33 cents, as revenue increased 16% to $87 million. Its operating margin expanded from 8% to 10% and its net margin topped 5%. The company has an admirable financial position, with $13 million of cash reserves, amounting to a quick ratio of 1.8, and a debt-to-equity ratio of just 0.3.

The stock

: Bio-Reference is up 14% this year, outpacing the

Dow Jones Industrial Average

and the

S&P 500 Index

. The stock trades at a costly price-to-earnings ratio of 23 and the company doesn't pay dividends.

Atrion

(ATRI) - Get Report

makes medical products and surgical tools.

The numbers

: Second-quarter net income grew 13% to $4.7 million, or $2.30, as revenue climbed 7% to $26 million. Its operating margin rose from 25% to 27% and its net margin climbed to 18%. Atrion has no debt and $22 million of cash, amounting to a quick ratio of 4.9.

The stock

: Atrion has gained 37% this year, outpacing major U.S. indices. The stock trades at a fair price-to-earnings ratio of 16 and offers a 1.1% dividend yield, less than the average of S&P 500 companies.

-- Reported by Jake Lynch in Boston

.