Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?



The Most Undervalued Small-Cap Service Stocks

  +Follow January 10, 2014 9:16AM
Tickers Mentioned:

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.


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

Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for VOXX
28 Jul 15 14:58:57
28 Jul 15 07:46:51
VOXX International adds Denise Gibson (Co-founder/Chair, Ice Mobility) to Board $VOXX #corpgov http://t.co/bsrR20EjT7
Large Void Bot
28 Jul 15 06:57:14
New 52wk Highs: $VOXX
MyAllies Trading
28 Jul 15 06:05:22
$VOXX VOXX International Corporation Directors Elected At Annual Shareholders Meeting http://t.co/MTJ1Hz7wVi
28 Jul 15 06:03:38
$VOXX VOXX International Corporation Directors Elected At Annual Shareholders Meeting From our Stock News Alerts App
Capital Market Labs
27 Jul 15 15:53:07
Interactive Chart -> http://t.co/jfTUvqTYjv $VOXX Revenue is Shrinking. http://t.co/0NDPNLHI8h
27 Jul 15 14:17:13
$VOXX New SEC Document(s) for VOXX From our Stock News Alerts App
27 Jul 15 14:12:30
$VOXX ALERT: New VOXX International Corporation SEC Filing From our Stock News Alerts App
27 Jul 15 14:10:02
$VOXX: New SEC Filing for VOXX: Form 8-K (No. 0000807707-15-000020): http://t.co/oeDlN2WCFS
SEC Filings Reporter
27 Jul 15 14:09:21
NEW SEC Filing for $VOXX filed a moment ago: http://t.co/0YTX2ZdmzT http://t.co/FUuXkz04jj
Sec Filings
27 Jul 15 14:06:55
$VOXX: VOXX International Corp filed a form 8-K. http://t.co/YcdpX1WzZj
27 Jul 15 14:02:08
$VOXX New SEC Document(s) for VOXX From our Stock News Alerts App
27 Jul 15 13:57:34
$VOXX ALERT: New VOXX International Corporation SEC Filing From our Stock News Alerts App
Capital Market Labs
27 Jul 15 00:13:14
$VOXX Very Poor Fundamental Rating -> http://t.co/OVcvZr2Ht7 http://t.co/5dylUXqK64
25 Jul 15 10:37:49
Timothy Sykes Pump pattern hits again $VOXX $MITK @timothysykes http://t.co/UsEaTmSYWo
Dakota Financial
24 Jul 15 12:39:12
Weekly Investment Analysts’ Ratings Changes for VOXX International Corp $VOXX http://t.co/ObCEB5WDJO
Capital Market Labs
24 Jul 15 12:27:26
2 Small and Mid Cap Retailing with Poor Fundamentals but Golden Cross $BKS $VOXX http://t.co/oT4DPLCzSx http://t.co/DAc8v33xXW
Ticker Report
24 Jul 15 12:26:41
Weekly Investment Analysts’ Ratings Changes for VOXX International Corp $VOXX http://t.co/GoAxDucqI3
Ophir Gottlieb
24 Jul 15 11:43:06
3 Small and Mid Cap Retailing with Poor Fundamentals and Bullish Momentum $BKS $VOXX $NWY http://t.co/lPLhu8eK9T http://t.co/Xcwfgjz09X
Steve K
22 Jul 15 12:42:12
Wonder if $VOXX can sneak a ride on $GPRO coat tails with upcoming launch of @360fly. Mind blowing video capture and #VR
Capital Market Labs
22 Jul 15 06:55:05
Interactive Chart -> http://t.co/jfTUvqTYjv $VOXX Revenue is Declining. http://t.co/ZenbJSMBeb
22 Jul 15 06:06:02
$VOXX: Wall Street analysts bullish on VOXX's earnings growth: http://t.co/zTBM2mpKO7 http://t.co/f3p1UxACme
21 Jul 15 17:06:02
$VOXX is rated BUY, 12.4% upside by Wall Street analysts based on average ratings/targets http://t.co/ZGJhToJ2UV http://t.co/y6xCIJxmDS
Ophir Gottlieb
21 Jul 15 08:57:19
$VOXX Very Poor Fundamental Rating -> http://t.co/QEqvPTbXTG http://t.co/P9tFsQpYsX
Capital Market Labs
21 Jul 15 03:07:17
$VOXX Very Poor Fundamental Rating -> http://t.co/OVcvZr2Ht7 http://t.co/o8e82iO20g
21 Jul 15 02:16:04
$VOXX: B. Riley Rating Update on VOXX International Corporation ...: http://t.co/Ad21SIQqWa
20 Jul 15 23:52:47
Bullish Cross http://t.co/f0JsFYuMEy $GES $PII $ANGI $QLTI $VOXX $TRIB $SBSI $PSTB $OXFD
  +Follow January 10, 2014 9:16AM



blog comments powered by Disqus

 Today's Must Reads

5 Small-Cap Energy with Hedges to Survive Oil's Bear Market

DraftKings and FanDuel: The New Face of Legalized Online Sports Betting

Is the Market Paying the Toll of Tech?

What Will Uber Look Like in the Future?

How Dodd-Frank Divides Political Parties Prior to 2016 Election


Apple (AAPL) is expected to announce its latest quarterly earnings next week. As the most valuable company by mark... in Equities.com's Hangs on LockerDome

About us

Equities.com is an advanced financial data portal and social network designed to connect self-directed investors with the world’s most innovative startup and small cap companies. Through our in-depth coverage of small cap markets, comprehensive research and stock valuation reports, state of the art issuer products, and world class events, Equities.com provides the social tools and insight that drive tomorrow’s investment relationships and opportunities.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.

Login or Register