The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Ian Wyatt

NEW YORK ( TheStreet) - The relentless push higher by stocks has many an analyst scratching his or her head right now.

They can scratch away, because the bottom line is this: Companies continue to beat earnings expectations. Since there's no way around that simple fact, the market continues to move higher.

Check this out. Through last Friday, data compiled by Capital IQ shows that 453 companies in the S&P 500 have reported, and 71 percent beat earnings expectations. The average upside surprise has been 6.1 percent.

With the S&P 500 trading at 16-times estimated 2010 earnings you might think large-cap stocks are getting expensive. They're really not. In a few weeks this fiscal year will be in the books. Based on the number of companies beating earnings estimates, forward earnings estimates should increase.

Right now, you can buy the S&P 500 for 14-times estimated 2011 earnings. That's not too bad when you consider that analysts expect long-term average EPS growth for the S&P 500 to exceed 10 percent.

Remember, buying growth at a low PE is typically better, and right now many large cap stocks look attractive.

This signals to me that we should still be buying small-cap stocks because as I've said a thousand times, small cap stocks always perform over the long term .

One of the best ways to find exciting small cap stocks is to monitor new additions to the small cap indices. I prefer the S&P 600 Small Cap Index, and the Russell 2000 Small Cap Index.

On Feb. 28, I found two companies that were added to the S&P 600:

Navigant Consulting ( NCI): This is a $485 million market cap company that provides specialized consulting services for things like change management, risk, and uncertainty. Its customers include hospital operator MedCath ( MDTH), privately held Ontario Power Authority, and the British Sky Broadcasting Group.

Why consider Navigant? Because uncertainty is virtually guaranteed these days, meaning this company should have a long list of potential customers. Also, analysts expect the company will increasing earnings by 19 percent this year. They have a price target on shares of $12.83, or 37 percent above yesterday's close.

Cardtronics ( CATM): Electronic payment processors have been hot stocks lately, and as an operator of ATMs and financial kiosks, Cardtronics is in the right industry. The company has a market cap of $811 million.

Analyst earnings projections are pretty impressive for Cardtronics. The consensus estimate for normalized EPS in 2011 is $1.21, a 92 percent increase over 2010. GAAP earnings estimates are less aggressive, so I'd encourage you to investigate what's going on in the unusual items section of the company's income statement.

In the past year the company has paid off long-term debt and sold off some assets. In 2008, the company recorded a $50 million impairment to goodwill. All of these items impact GAAP EPS.

At first blush, these unusual items tell me the company had to get reorganized internally, and its recent addition to the S&P 600 indicates that its efforts are paying off. Four analysts rate the stock a buy with a consensus target price that is 20 percent above yesterday's close.

A word of caution before you rush out to buy anything: The market has been on a one-way track higher lately. In recent sessions we've begun to see a loss of momentum, so while many stocks are still attractively valued that doesn't mean go buy everything you want right now.

Put together a watch list of stocks you want to own, and figure out the price that you want to pay. Then use volatility in the market to get your price. If you have a number of stocks ready to pounce on, than chances are your number will come up on at least a couple.

Navigant Consulting and Cardtronics are two stocks to consider, especially since inclusion in the S&P 600, or Russell 2000, can be the beginning of a longer run higher.

Further Reading: A month or so ago, small-cap analyst Tyler Laundon put together a report on five small-cap stocks that he felt had the chance to deliver big gains for subscribers to Small Cap Investor PRO. One of these stocks is up 240 percent since being recommended in August, 2010. Another is up 111 percent.

You can access the report on these companies here . Within the next week, another report will be published that features the next group of high potential small caps technology stocks. As a subscriber, you'll be among the first to receive the report.

Disclosure: none
Wyatt Investment Research, founded in 2001 as a publisher of newsletters, offers independent investment research of financial markets, stocks, bonds, ETFs and mutual funds to about 250,000 individual investors. The company is led by founder Ian Wyatt, who serves as publisher and chief investment strategist.