BOSTON (TheStreet) -- Many small-caps are selling at a discount as investors favor large-company shares. Here are five cheap small-company stocks.

5. Connecticut Water Service ( CTWS) is a regulated water utility.

The numbers: Third-quarter profit doubled to $5.8 million, or 67 cents a share, as revenue declined 2% to $17 million. The company's operating margin extended from 32% to 36%. Connecticut Water Service has a poor liquidity position, evident in its quick ratio of 0.5. Its 1.1 debt-to-equity ratio indicates sizable leverage.

The stock: Connecticut Water Service increased 5% during the past year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 18, a premium to water-utility peers. The shares offer a 3.9% dividend yield.

4. Atrion ( ATRI) sells health-care supplies.

The numbers: Third-quarter profit rose 12% to $4.5 million, or $2.20 a share, as revenue climbed 7% to $25 million. Atrion's operating margin widened from 25% to 26%. The company has an ideal financial position, with $19 million of cash and no debt.

The stock: Atrion soared 80% during the past year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 18, a discount to health-care-supply peers. The shares offer a 0.9% dividend yield.

3. Orchids Paper Products ( TIS) manufactures paper towels and napkins.

The numbers: Third-quarter net income surged 168% to $3.8 million, and earnings per share increased 136% to 52 cents. Revenue climbed 5% to $25 million. The company's operating margin stretched from 10% to 23%. Orchids has a stable financial position, reflected by its quick ratio of 3 and debt-to-equity ratio of 0.4.

The stock: Orchids Paper Products more than doubled during the past year, outperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 11, a discount to household-products peers. Orchids doesn't pay dividends.

2. Hawkins ( HWKN) sells specialty chemicals.

The numbers: Fiscal second-quarter profit declined 2% to $6.7 million, or 65 cents a share. Revenue dropped 17% to $65 million. The company's operating margin ascended from 14% to 17%. Hawkins has an ideal financial position, with $37 million of cash and no debt.

The stock: Hawkins climbed 47% during the past year, more than the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio of 9, a discount to chemical peers. The shares offer a 2.5% dividend yield.

1. American Physicians Service Group ( AMPH) sells medical-liability insurance and manages investments.

The numbers: Third-quarter profit fell 10% to $6.4 million, or 92 cents a share. Revenue advanced 13% to $22 million. The company's operating margin decreased from 56% to 43%. American Physicians Service Group has an admirable financial position, with $30 million of cash and $6.6 million of debt.

The stock: American Physicians Service Group advanced 5% during the past year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 8, a discount to insurance peers. The shares offer a 1.4% dividend yield.

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