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3 Small-Cap Stocks With Sky-High Growth Potential

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Finding companies with the criteria you want isn’t always easy.  You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash.  An easier way to navigate through this is by using high quality stock screeners.  Screening helps investors narrow down companies to invest in based on their ability to meet every criteria selected.  Any company who misses even one of the criteria requirements will be filtered out.

This lets one easily choose ideal metrics.  Screens are effective because they sift out bad stocks and only keep the cream of the crop in.  It isn’t always easy to create an effective screen.  Our Zacks Premium Screens  have helped with this, bringing profits to many investors over time.  Our predefined criteria are chosen carefully to capture special kinds of companies.

Today, we’ve dug up 3 stocks using one of our premium screens known as “Zacks #1 Rank Growth Stocks”.  Some of the metrics of this screen requires a stock to have trading volume above 100,000 shares per day, expected EPS growth of 20% this year, and a Zacks Rank #1 (Strong Buy).  One additional criterion we added to the screen allowed us to search for companies with market caps under $1 billion.  Small-cap stocks have the potential to see higher levels of growth, so these companies could do your portfolio a lot of good.

Oclaro Inc-

Oclaro Inc. provides high performance optical components, modules, and subsystems to the telecommunications market.  The company leverages proprietary core technologies and vertically integrated product development to sell customers cost-effective products.  Oclaro has a market cap of $827.65 million, and it gets a grade of “A” for growth in our Style Scores.

OCLR trades at a reasonable forward PE of 19.73, and it also has a pretty low PEG of 1.2.  With valuations like these, the stock does not look too expensive.  The company is expected to see significant growth this year, with sales and EPS projected to grow by 30.45% and 367.5% respectively. 

Analysts covering OCLR have been revising their earnings estimates upwards.  In the last 30 days, our current year EPS consensus has increased by 117%, going from $0.17 to $0.37.  Oclaro could very well surpass this estimate since it has beaten estimates in each of the last four quarters.  Over that time span, the company has topped our consensus by an average of 101% per quarter.   

 

ANI Pharmaceuticals Inc-(ANIP - Free Report)

 ANI Pharmaceuticals is a special pharmaceutical company that develops and sells branded and generic prescription drug products.  Through various forms of drug delivery, the corporation sells cough and cold products, antacids, laxatives, stomach remedies, and more.  ANIP, like every other stock in this article, is a Zacks Rank #1 (Strong Buy).

ANI Pharmaceuticals has a forward PE of 18.22.  The firm has seen high sales growth over the last few years, and since 2013, sales have grown by over 150%.  Top line growth is expected to be realized this year, and sales are forecasted to increase by 68%.  Earnings should see significant growth as well, with EPS expected to grow by 55%.  Unlike many small pharmaceutical companies, ANI has a nice capital structure.  ANIP has a current ratio and debt-to-capital of 3.23 and 0.41 respectively.

ANI PHARMACEUT Revenue (Quarterly)

ANI PHARMACEUT Revenue (Quarterly) | ANI PHARMACEUT Quote

 

FormFactor Inc-(FORM - Free Report)

FormFactor Inc. develops and manufactures high performance advanced semiconductor wafer probe cards.  Their technology, such as its MicroSpring interconnect technology, enables FormFactor to produce wafer probe cards for test applications that require reliability, speed, precision, and signal integrity.  FORM has a market cap of $766 million, and shares have picked up 43% in value since June.

Over the last five years, sales have grown by 66.86%.  This year is expected to be an especially momentous one for FormFactor, as the company’s revenues and EPS are projected to grow by 35% and 52.94% respectively.  FORM has a trailing twelve month net margin of 7.27%, and this is way ahead of the industry’s average net margin of 2.16%.  FormFactor has topped our EPS estimate in three of the last four quarters.  In its most recent quarterly beat, EPS came in at $0.10, and this topped our consensus by 42.86%.  FormFactor is expected to release its next quarterly earnings results in late October.     

FORMFACTOR INC Revenue (TTM)

 

Bottom Line

One magical screening ingredient which can’t be overlooked is the Zacks Rank #1 (Strong Buy).  The rank helps to find companies which look like strong earnings candidates.  In addition to this great metric, the Zacks Premium Screens help you to add other criteria to find the most superior investment choices.  While this article outlined potential candidates from one screen, the Zacks Premium service gives you access to the “Zacks #1 Rank Growth Stocks” and 45 other premium screens designed to give you superior investment returns.

To use Zacks Premium Screens to find more stock picks based on criteria that’s most important to you— plus, gain access to the Zacks Rank for your stocks, mutual funds and ETFs; Zacks Style Scores, Equity Research Reports; Focus List portfolio of 50-longer-term stocks and more—start your 30-day free trial to Zacks Premium.


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