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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.


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Results for VOXX
Daily Contracts
23 Sep 14 14:00:02
Real-Time feed of company contracts, original agreements and executive updates from Voxx International $VOXX http://t.co/adpUOrKZBl
Russell Barbour
23 Sep 14 13:36:30
Wow Super_trades has made over $2 M ILLION in the last year!! check out his chart http://t.co/EfuNMUT9XP #stocks $VOXX $EKSO #trading $RWLK
eranshlomi
23 Sep 14 13:33:44
RT @ForTraders: VOXX : Launches Lane Departure and Forward Collision Warning System with In-Vehicle Camera http://t.co/HsVHxj30W3 $VOXX
4-traders.com
23 Sep 14 13:20:13
VOXX : Launches Lane Departure and Forward Collision Warning System with In-Vehicle Camera http://t.co/HsVHxj30W3 $VOXX
kcprinters
23 Sep 14 13:04:46
$RITT makes up for red in $VOXX today...cut losers quick, ride the winners...only way to succeed with an avg win/loss %!
Livevol Community
23 Sep 14 13:00:07
Gainers: $JRJC+17.64% $NQ+13.25% $XLRN+13.04% Losers: $ASNA-17.00% $JDST-10.57% $VOXX-10.05% Stock Movers Report: http://t.co/MImGl1GweW
John Harrell
23 Sep 14 12:51:50
$VOXX - back in at $9.59 after selling the last pop at $11.23, as their 360Fly launches any day now and blows away $GPRO.
Mook Trader
23 Sep 14 12:46:36
$VOXX tanking -6% in past hour
rishi
23 Sep 14 10:55:49
RT @kcprinters: $VOXX great review here from the CES this year http://t.co/HOAWWy3Tvg … $GPRO killer if they execute
kcprinters
23 Sep 14 10:48:26
$VOXX took off my add, holding my long term options. Obvious seller u just can't beat and not just going to ride down. Looking for bottom.
kcprinters
23 Sep 14 09:51:32
$VOXX great review here from the CES this year http://t.co/HOAWWy3Tvg … $GPRO killer if they execute
kcprinters
23 Sep 14 09:22:11
$VOXX added trade shares - 360fly also backed by $QCOM/catterton and a real $GPRO threat from all reviews I see. Nov rollout the key.
RichJr
23 Sep 14 08:56:10
adding $VOXX long @super_trades ... disruptive product coming up.. $GPRO taking out all the highs
Random Stocks Daily
23 Sep 14 05:55:39
Today's random choice: $ASR $CBD $RTGN $ACUR $VOXX $CSCB $AKO.B $TIK $RMAX $CKH. More details at http://t.co/FOOriXawTk
Russell Barbour
23 Sep 14 01:41:45
Wow Super_trades has made over $2 M ILLION in the last year!! check out his chart http://t.co/uBX7WCneox #stocks $VOXX $EKSO #trading $RWLK
Profit.ly
22 Sep 14 10:22:29
RT @St0ckReviews: $4,911 profit verified here: http://t.co/pjklR5ae0H thanks to Super_Trades for the alert! $VOXX $MXC $CDZI $MAGS $ADPT $L…
ManateeMan
22 Sep 14 09:37:44
RT @kcprinters: $VOXX 360fly rollout planned for November (as per company) - just in time for xmas. Watch out $GPRO!
kcprinters
22 Sep 14 09:29:21
$VOXX 360fly rollout planned for November (as per company) - just in time for xmas. Watch out $GPRO!
Daily Contracts
22 Sep 14 07:09:02
Real-Time feed of company contracts, original agreements and executive updates from Voxx International $VOXX http://t.co/adpUOrKZBl
4-traders.com
22 Sep 14 01:10:28
Voxx : to Present at the California Dreamin' Consumer Management Access Conference http://t.co/Fvx38FLNdT $VOXX
4-traders.com
22 Sep 14 01:10:06
Voxx : CEO Pat Lavelle to Present at Wedbush Securities Conference http://t.co/Qm80kdzzqV $VOXX
PennyStock Zone
21 Sep 14 21:48:02
$4,911 profit verified here: http://t.co/pjklR5ae0H thanks to Super_Trades for the alert! $VOXX $MXC $CDZI $MAGS $ADPT $LPCN $IKNX $FSI
Greg Keown
21 Sep 14 18:00:15
RT @super_trades: $VOXX potential $GPRO killer to be released looking good on chart
Greg Keown
21 Sep 14 18:00:09
RT @kwilliam718: $VOXX aka $GPRO killer. Video: http://t.co/qJzGD3Dp5N Way better than $GPRO
Greg Keown
21 Sep 14 18:00:04
RT @udgstocks: $voxx Gopro competitor, better camera than Gopro's by some. added some more today. Might be early, but at some point trad…
Greg Keown
21 Sep 14 17:59:56
RT @LaMonicaBuzz: Is $VOXX the new $GPRO? Seeing a lot of trader chatter about how it could be a GoPro killer. But $VOXX has lagged $GPRO s…
Russell Barbour
21 Sep 14 16:28:44
Wow Super_trades has made over $2 M ILLION in the last year!! check out his chart http://t.co/EfuNMUT9XP #stocks $VOXX $EKSO #trading $RWLK
PennyStock Zone
21 Sep 14 08:53:03
$4,911 profit verified here: http://t.co/d7Vci9JgRk thanks to Super_Trades for the alert! $VOXX $MXC $CDZI $MAGS $ADPT $LPCN $IKNX $FSI
4-traders.com
19 Sep 14 22:40:14
Voxx : to Present at the Wedbush Securities California Dreamin' Consumer Management Access Conference http://t.co/q18v48qADC $VOXX
4-traders.com
19 Sep 14 22:40:12
Voxx : Electronics to Promote Singtrix http://t.co/wqzzxIR2kJ $VOXX
Russell Barbour
19 Sep 14 12:50:39
Wow Super_trades has made over $2 M ILLION in the last year!! check out his chart http://t.co/EfuNMUT9XP #stocks $VOXX $EKSO #trading $RWLK
Russell Barbour
18 Sep 14 19:10:22
Wow Super_trades has made over $2 M ILLION in the last year!! check out his chart http://t.co/EfuNMUT9XP #stocks $VOXX $EKSO #trading $RWLK
Paul R. La Monica
18 Sep 14 12:18:06
Is $VOXX the new $GPRO? Seeing a lot of trader chatter about how it could be a GoPro killer. But $VOXX has lagged $GPRO since its IPO.
StocksBuzz
18 Sep 14 11:42:26
Bought $voxx at 11.07 for a swing
rishi
18 Sep 14 09:18:42
Bought a few $voxx at $10.93 good spot to add
Brooks
18 Sep 14 07:47:37
RT @udgstocks: $voxx Gopro competitor, better camera than Gopro's by some. added some more today. Might be early, but at some point trad…
NTI
18 Sep 14 07:42:37
$voxx Gopro competitor, better camera than Gopro's by some. added some more today. Might be early, but at some point traders will push
William Kim
18 Sep 14 07:28:36
$VOXX aka $GPRO killer. Video: http://t.co/qJzGD3Dp5N Way better than $GPRO
William Kim
18 Sep 14 07:15:36
$VOXX in. $GPRO Killer!
S Romberger
18 Sep 14 07:05:56
RT @super_trades: $VOXX potential $GPRO killer to be released looking good on chart
Nate Quinn
18 Sep 14 06:55:59
$VOXX perking as expected, once this clear 11.50 it's game on. Some competition coming for $GPRO. Wait till the masses find this
The Intern
18 Sep 14 06:52:24
Out of $TKAI good quick scalp on that scary opening candlestick, Watching $NXPI for breakout, In $VOXX could be a hot breakout today. GL
@super_trades
18 Sep 14 06:46:22
$VOXX potential $GPRO killer to be released looking good on chart
chartguy89
17 Sep 14 22:14:45
VOXX 11.08 Stock Charts $VOXX VOXX International Corp. Cl A (NASDAQ) Last Updated: 09/18/2014 00:14:52 VOXX St http://t.co/0ySryDG59c
Russell Barbour
17 Sep 14 21:39:13
Wow Super_trades has made over $2 M ILLION in the last year!! check out his chart http://t.co/EfuNMUT9XP #stocks $VOXX $EKSO #trading $RWLK
Daily Contracts
17 Sep 14 12:31:02
Real-Time feed of company contracts, original agreements and executive updates from Voxx International $VOXX http://t.co/adpUOrKZBl
steve Erkel
17 Sep 14 08:01:44
$tube on the move? $rada, $WLDN, $DGLY, $RIC, $LIQT, $VOXX, $AMCF, $SYN, $HPJ, $TKMR, $KUTV, $LRAD, $REED, $FONR, $NTWK, $CDZI
Nate Quinn
17 Sep 14 06:57:17
$VOXX great chart setup here and catalyst with camera launch coming up soon res. 11.50 then 14 http://t.co/r9vqerE3x0 http://t.co/9apjUxz3lk
Russell Barbour
16 Sep 14 22:14:27
Wow Super_trades has made over $2 M ILLION in the last year!! check out his chart http://t.co/EfuNMUT9XP #stocks $VOXX $EKSO #trading $RWLK
cldk
16 Sep 14 19:59:21
$voxx and $sqbg charts look very similar....both look like good swing trades
				
				
  +Follow January 10, 2014 9:16AM
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