NEW YORK (TheStreet) -- Small-cap stocks could be a good investing opportunity if you're looking to get in on a company that may be small today but has potential to hit it big.
TheStreet analyzed which small-cap industrials stocks present the best opportunity for investors looking for exposure to the sector.
The S&P 500 Industrial Sector Index is up 9.3% this year compared to the broader S&P 500 index this year, which is up 13%.
TheStreet Ratings, TheStreet's proprietary stock rating tool projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 30 major data points, TheStreet Ratings uses a quantitative approach to rating stocks. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.
The 12 stocks on the list are all small-cap stocks (market capitalizations of below $1 billion) and have a "buy" rating, with a B or better grade from TheStreet Ratings. Which small-cap industrials stocks should you target for the best returns? Click through to see which companies are top-rated stocks.
Breeze-Eastern Corp. (BZC)
Rating: Buy, B
Year-to-date return: 9.5%
Breeze-Eastern Corp. designs, develops, manufactures, sells, and services engineered mission equipment for specialty aerospace and defense applications.
"We rate BREEZE-EASTERN CORP (BZC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
You can view the full analysis from the report here: BZC Ratings Report