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The Most Undervalued Small-Cap Service Stocks

  +Follow January 10, 2014 9:16AM
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The service sector often does not get the attention of some of its flashier cousins in Tech and Financials, but service stocks can offer a nice opportunity for retail investors looking for an overlooked investment opportunity. But which plays within the service sector are unjustly overlooked, and which are rightly-ignored dogs?

To find that out, we went looking for small-cap (worth between $300 million and $2 billion) service stocks that met four separate benchmarks that we felt indicated an investment poised for growth. They are:

1)      The company must have a profit-to-earnings ratio less than 15.

A low P/E indicates a company is making more money than their stock is worth. Of course, the correlation doesn’t always work out that way, but a  P/E under 15 indicates that there is a good chance that there is some undervaluation going on.

2)      The company must have a forward P/E of less than 15.

We wanted to find companies that are not just undervalued now, but look to continue to be so in the future.

3)      The company must be expected to grow EPS by at least 25 percent over the next year.

A high earnings-per-share (EPS) growth indicates that the company can be expected to become more profitable in the near future. And everyone likes to invest in companies that are expected to become more profitable.

4)      The company does not pay a dividend.

Small-cap service stocks pay a dividend because they cannot figure out how else to spend the money. Service companies, especially when they are growing, are better off spending money on advertising than on placating investors with a cash dividend.

After applying this criteria to the market, we found four small-cap service stocks we felt had a chance for experiencing growth in the coming year. They are:

VOXX International Corporation (VOXX)

Market Cap: $338.03 million

Price: $14.00

VOXX is a consumer electronics corporation based out of New York. Formerly known as Audiovox, the company manufactures commercial and consumer electronic accessories and audio equipment. While the company’s fundamentals might be string, ti should be noted that the stock dropped 17 percent on Jan. 9 on a poor earnings report.  

StealthGas Shipping (GASS)

Market Cap: $328.86 million

Price: $10.26

As their name implies, this Greek shipping company specializes in the transportation of petroleum and petrochemical gas products. The company sports an impressive forward P/E of 8.59 and yearly EPS growth of 67.37 percent.

EZCORP, INC. (EZPW)

Market Cap: $594.94 million

Price: $10.97

EZCORP is one of the largest pawn shop chains in the world, providing high-interest loans to a predominantly low income clientele. EZCORP got hammered in 2013, losing nearly half its value. However, the stock was recently upgraded by Zacks to “neutral” and sports a very impressive forward P/E of 5.98

Eros International plc (EROS)

Market Cap: $332.17 million

Price: $10.94

Eros International distributes movies from “Bollywood,” India’s fast-growing movie making sector. Eros just went public in late 2013. The service play has already attracted attention from investors looking to cash in on India’ entertainment boom. Eros sports very strong fundamentals, including an exceptional low P/E of 5.58, and an analyst consensus of “strong buy.”

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for VOXX
Stock Trade Alerts
26 Mar 15 09:49:10
SHORT Seller Alert $VOXX - VOXX INTL #ShortSeller #Stocks ~ via #AlertTrade
Market Buzz
25 Mar 15 18:23:24
RT @Allstocknews: $VOXX ALERT: New VOXX International Corporation SEC Filing From our Stock News Alerts App
BreakingStocksNews
25 Mar 15 16:20:03
$VOXX: VOXX International Corp CEO Patrick M. Lavelle Sells 14796 ...: http://t.co/dYsdcC4TD5
The Legacy News
25 Mar 15 14:27:23
VOXX International Corp CEO Patrick M. Lavelle Sells 14,796 Shares $VOXX http://t.co/SetlWWGMPA
Daily Contracts
25 Mar 15 14:15:02
Real-Time feed of company contracts, original agreements and executive updates from $VOXX http://t.co/YAqwlLqbN9
US Banking News
25 Mar 15 13:48:00
VOXX International Corp CEO Patrick M. Lavelle Sells 14,796 Shares $VOXX http://t.co/WTDfoaK1MC
ProVesting
25 Mar 15 13:40:03
$VOXX: VOXX International Corp CEO Patrick M. Lavelle Sells 14796 ...: http://t.co/mbLmlaukyc
Sleek Money
25 Mar 15 13:35:26
VOXX International Corp CEO Patrick M. Lavelle Sells 14,796 Shares $VOXX http://t.co/twyYFCcA6P
Trader Connect
25 Mar 15 11:37:20
RT @Allstocknews: $VOXX New SEC Document(s) for VOXX From our Stock News Alerts App
Merger Eagle
25 Mar 15 10:25:36
RT @Allstocknews: $VOXX New SEC Document(s) for VOXX From our Stock News Alerts App
$Stocknewsalerts
25 Mar 15 08:30:57
$VOXX New SEC Document(s) for VOXX From our Stock News Alerts App
$Stocknewsalerts
25 Mar 15 08:18:30
$VOXX ALERT: New VOXX International Corporation SEC Filing From our Stock News Alerts App
NASDAQ
25 Mar 15 08:16:08
$VOXX - Statement of Changes in Beneficial Ownership (4) http://t.co/05AkKmtA4B
NASDAQ
25 Mar 15 08:16:07
$VOXX - Statement of Changes in Beneficial Ownership (4) http://t.co/icHNriAp60
Insider Filings
25 Mar 15 08:15:20
$VOXX: LAVELLE PATRICK M sold a net $32,699 in VOXX International Corp. http://t.co/4JSaWmvoV0
Insider Filings
25 Mar 15 08:14:09
$VOXX: Shelton Loriann sold a net $2,007 in VOXX International Corp. http://t.co/4JSaWmvoV0
Breaking News Now
25 Mar 15 08:14:02
$VOXX: New Insider Transaction on VOXX by Senior Vice President and CAO: http://t.co/jRga5Wsjnm
Insider Alerts
25 Mar 15 08:13:05
NEW insider transaction on $VOXX reported a moment ago: http://t.co/5zWlvtpV2s
Steve Feffer
25 Mar 15 07:43:56
$VOXX 9.15 hit
Steve Feffer
25 Mar 15 07:11:43
$VOXX hourly 20sma hold
Penny Stock Secret
25 Mar 15 00:06:03
Yesterday We Made $94,000 In Just One Trade More Info Here http://t.co/NovWYeksZ7 .. $DNDN $NAII $VOXX
12Stocks.com
24 Mar 15 08:53:59
SmallCap #Stocks Trend $BTX $PRTA $DVAX $MDR $RTRX $VOXX $RRGB $SONC $BRLI $RALY $TXMD $WGO $SCVL $ELY more@ http://t.co/Giravo3fg9
Kijun Tenkan
24 Mar 15 07:05:37
$VOXX 2015 Jeep First to Incorporate EyeLock's Iris Identity Authenticator http://t.co/CjjyS682Aa Phil LeBeau @Lebeaucarnews @CNBC
Christopher Angus
24 Mar 15 07:00:02
Premarket most advanced stocks: $CHRS, $ABMD, $LNCO, $VOXX, $ARAY, $LOGI, $LINE, $AMTX, $YNDX, $GIII
dailystockplays.com
24 Mar 15 06:13:37
CHRS, VCEL, ATOS, VOXX, NSM Active In Premarket Trading http://t.co/GwDh1eTTYt $CHRS $VCEL $ATOS $VOXX $NSM
Kijun Tenkan
24 Mar 15 06:01:44
$VCEL $ARAY $ORMP $VOXX potential to go as much or higher % move up then $DGLY after late day/afterhours action yday
NASDAQ
24 Mar 15 04:02:20
$VOXX - VOXX International: Not Cheap Enough http://t.co/LoARo0gwQR
Seeking Alpha
24 Mar 15 04:00:06
VOXX International: Not Cheap Enough http://t.co/PuIjcIRiPY $VOXX
Steve Feffer
23 Mar 15 20:58:48
$VOXX sickness from 9.06 break. In 9.06
3 Grand
23 Mar 15 18:40:26
@Jason4CrudeOil what's goin on with $VOXX? Why the gains
3 Grand
23 Mar 15 18:38:07
RT @Jason4CrudeOil: @StanMattingly Add $VOXX and you bank $
A Crude American
23 Mar 15 18:35:38
@StanMattingly Add $VOXX and you bank $
The Fly
23 Mar 15 16:13:37
On The Fly: After Hours Movers $VCEL $CHRS $VOXX $CHK $ABMD $CCM $JRJC $WLL $GLP $HTGC $SAAS $CHSP: Full Story http://t.co/AywiUX1C7A
Breaking News
23 Mar 15 14:20:03
$VOXX: 2015 Jeep First to Incorporate EyeLock's Iris Identity Authenticator: http://t.co/THLlS5zkmY
StockNewsWires
23 Mar 15 14:00:04
$VOXX: 2015 Jeep First to Incorporate EyeLock's Iris Identity Authenticator: http://t.co/4CN9JOZLld
12Stocks.com
23 Mar 15 13:02:31
SmallCap #Stocks Trend $GPT $OCLR $KVHI $SEM $GNCMA $LXFT $VOXX $RALY $USAP $SONC $DY $AMRC $VG $USNA more@ http://t.co/Giravo3fg9
Dollars2Donuts
23 Mar 15 11:01:43
@CNBCFastMoney @GuyAdami @petenajarian @BKBrianKelly @grassosteve Best way to play EyeLock as LT speculative? Is it $VOXX or alternate? Thx!
Steve Feffer
23 Mar 15 10:15:58
$VOXX consolidation over. 9.34+ retest
Phil Martin
23 Mar 15 09:45:53
$VOXX http://t.co/vS7XfDXUFF
MCAchampions
23 Mar 15 09:43:51
$VOXX breaking out
Steve Feffer
23 Mar 15 09:42:45
$VOXX +9.45=nuts
Steve Feffer
23 Mar 15 09:38:48
$VOXX in 9.06 9.45 resis after 2 year trend break
Capital Market Labs
23 Mar 15 07:14:18
$POOL, $CORE, $WEYS, $BLCK, $VOXX Earnings Trend Comparison http://t.co/eYqZf515Yp https://t.co/O7J0gCDLXd
Steve Feffer
22 Mar 15 16:55:33
Monday watchlist for starters: $ENVI $VRS $INNL $APRI $FGEN $SNTA $VOXX $GSI $PRMW
chartguy89
22 Mar 15 05:42:06
VOXX +2.54% Stock Charts $VOXX VOXX International Corp. Cl A (NASDAQ) Last Updated: 03/22/2015 07:42:01 VOXX S http://t.co/nvQUQJR5ii
Capital Market Labs
22 Mar 15 02:35:56
$POOL, $CORE, $WEYS, $BLCK, $VOXX EPS Trend Comparison http://t.co/TOJWJJnujR https://t.co/O7J0gCDLXd
Capital Market Labs
21 Mar 15 19:19:13
$POOL, $CORE, $WEYS, $BLCK, $VOXX Earnings Trend Comparison http://t.co/eYqZf515Yp https://t.co/O7J0gCDLXd
				
				
  +Follow January 10, 2014 9:16AM
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