- (0:15) – Finding value among growth small caps: Stock screening
- (6:10) – Tracey’s top stocks for your watchlist
- (11.20pm) – Collection of episodes: ATRO, AVD, MATV, QUAD, SNCR
Welcome to episode no. 362 of the Value Investor podcast.
Every week, Tracey Ryniec, director of Zacks Portfolio for value investorsshares some of his best advice on investing and choosing stocks.
Large-cap growth stocks are still hitting new highs, but what about small caps? They are still late, especially in the case of small caps. However, historically, small-cap value stocks have been one of the best-performing equity asset classes.
Maybe it’s time to take a look at some of the top small-cap stocks that are also on sale?
Screening for small cap stocks with growth and value
If you’re going to buy small-cap value stocks, why not get some growth too? It’s a rare combination but also a powerful one.
Zacks has the perfect premium screen for this. He selects stocks with a market capitalization under $1 billion that last closed above $5.
Look for a growth rate above 20% and, in terms of value, select stocks with a price-to-sales ratio below 1.0. AP/S ratio below 1.0 usually means a company is undervalued.
Furthermore, the addition of a Zacks Rank of Buy or Strong Buy should give you stocks for which analysts have revised their earnings estimates upward for this year.
This screen returned 11 small cap stocks.
Top 5 small-cap growth and value stocks
1. Astronics Corp. ATRO
Astronics serves defense, aerospace and other mission-critical industries globally. It has a market capitalization of $607 million.
Astronics shares are up 35.8% over the past year, easily outpacing that of the small-cap Russell 2000 index, the IWM, which is up 16.6% over the same period. Astronics is still cheap with a P/S ratio of 0.9.
Should Astronics be on your small cap short list?
2. American Vanguard Corp. AVD
American Vanguard is a diversified specialty and agricultural products company producing solutions for crop protection and nutrition, turf and ornamental management, and commercial and consumer pest control. It has a market capitalization of $311 million.
Shares of American Vanguard have fallen over the past year due to the difficulties the agricultural sector has faced. That’s down 44.3% from last year. But American Vanguard is cheap with a P/S ratio of just 0.6 and a forward P/E of 15.7.
Should a small-cap ag like American Vanguard be on your shortlist?
3. Mativ Holdings, Inc. TV
Mativ Holdings is a specialty materials company based in Alpharetta, GA. However it produces on 3 continents. Mativ Holdings has a market capitalization of $979 million.
Mativ Holdings shares are down 19% over the past year and recently traded near 5-year lows, falling 53.5% during that time. It is cheap with a P/S ratio of just 0.4.
Is this a buying opportunity in Mativ Holdings?
4. Quad/Graphics PAINTING
Quad/Graphics is a global marketing expertise company. It serves 2,700 customers and has employees in 14 countries. Quad/Graphics has a market capitalization of $254 million.
Quad/Graphics shares are up 20.6% over the past year, but over a 5-year period they are down 58.2%. It is cheap with a forward P/E of 6.6. Quad/Graphics also pays a dividend, which is rare for a small-cap company.
Should Quad/Graphics be on your shortlist?
5. Synchronoss Technologies, Inc. SNCR
Synchronoss Technologies is a pure cloud company with a market capitalization of $107 million. It is currently in transition and divesting from its messaging and NetworkX businesses.
Synchronoss Technologies shares are up 28.7% over the past year but are down 88% over the 5-year period. Earnings for Synchronoss are also expected to be negative in both 2024 and 2025. It is cheap with a P/S ratio of just 0.5.
Should Synchronoss Technologies be on your shortlist?
What else do you need to know about small-cap growth and value stocks?
Tune in to this week’s podcast to find out.
To read this article on Zacks.com click here.