TSC Ratings provides exclusive stock, ETF and mutual fund recommendations using proprietary tools. Our "safety first" approach aims to reduce risk while achieving total return performance.
The following small-cap companies have market values between $50 million and $500 million and receive "buy" ratings from our proprietary quantitative model, which considers more than 60 factors. They are ordered by their potential to appreciate.
blends and distributes bulk and specialty chemicals for water treatment, and industrial and pharmaceutical use.
: Fiscal fourth-quarter revenue rose 32% to $68 million as net income surged 194% to $5.1 million and earnings per share climbed 182% to 48 cents. The operating margin increased to 11% and the net margin jumped to 8%. The company has zero debt and ample liquidity, as reflected by a quick ratio of 2.1.
: Hawkins has increased 30% in 2009, outperforming all major U.S. indexes. Yet the stock trades at a price-to-earnings ratio under 9, indicating a discount to the market, and pays a 2.6% dividend yield.
American Physicians Group
provides medical professional liability insurance for physicians and health-care providers in Texas. The company also has an investment arm that provides advice and asset management to institutions and wealthy individuals.
: First-quarter revenue fell 2% to $19 million as net income ascended 40% to $4.7 million and earnings per share increased 46% to 67 cents. The operating margin surged to 38% and the net margin climbed to 25%. The company boasts minimal debt and ample liquidity, as reflected by $38 million of cash.
: American Physicians Group is up 7% in 2009, outperforming the
Dow Jones Industrial Average
. The stock trades at a cheap price-to-earnings ratio of 8, but offers a weak 1.3% dividend yield.
Applied Signal Technology
( APSG) provides intelligence, surveillance and reconnaissance solutions for the defense and homeland security markets.
: Fiscal second-quarter revenue increased 18% to $54 million as net income and earnings per share doubled to $4 million and 31 cents, respectively. The operating margin climbed to 12% and the net margin ascended 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.
: Applied Signal Technology has surged 45% in 2009, outperforming all major U.S. indexes. The stock trades at an expensive price-to-earnings ratio of 28 and offers a lackluster 1.9% dividend yield.
produces specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical and medical sterilization industries.
: First-quarter revenue declined 7% to $53 million, but net income jumped 31% to $6.1 million and earnings per share climbed 28% to 32 cents. The operating margin increased from 13% to 17% and the net margin improved from 8% to 12%. The company has a strong cash position, as demonstrated by $19 million of reserves and a quick ratio of 1.8. And a debt-to-equity ratio of 0.1 indicates modest leverage.
: Balchem has increased 5% in 2009, outperforming the Dow and underperforming the S&P 500. The stock trades at an expensive price-to-earnings ratio of 24 and offers a dividend yield below 1%.
provides IT engineering and professional services to federal agencies. With mounting budget deficits and a growing national debt, Washington is looking to streamline. NCI offers an attractive play on this trend.
: First-quarter revenue increased 15% to $105 million as net income rose 29% to $4.7 million and earnings per share climbed 26% to 34 cents. The operating margin improved to 8% and the net margin widened to 5%. The company has a high quick ratio of 1.6, but just $1.4 million of cash, compared with $31 million of debt.
: NCI is flat in 2009, underperforming the Dow and S&P 500. The stock trades at a high price-to-earnings ratio of 23 and doesn't pay dividends.
TSC Ratings was given an award this year for "Best Stock Selection" among independent research providers by BNY ConvergEx Group. A rating can be viewed for any stock through our
. Ratings are derived from a variety of fundamental and pricing figures and represent our opinion of risk-adjusted performance. However, the rating doesn't incorporate all factors that can alter a stock's performance.