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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
Equity Killer
26 Jan 15 16:20:53
Check out @spartanstocks they have the best content around at a much better price http://t.co/REZRVMcJpi $ADXS $VOXX $SWHC
Daily Contracts
26 Jan 15 09:53:01
Real-Time feed of company contracts, original agreements and executive updates from Voxx International $VOXX http://t.co/rjMVRFueLK
Daily Contracts
26 Jan 15 09:39:01
Real-Time feed of company contracts, original agreements and executive updates from Voxx International $VOXX http://t.co/rjMVRFueLK
Daily Contracts
26 Jan 15 07:39:01
Real-Time feed of company contracts, original agreements and executive updates from Voxx International $VOXX http://t.co/rjMVRFueLK
Penny Stock Secret
25 Jan 15 20:43:51
This Guy Turned $100 into over $10,000 In Just 30 Days! http://t.co/vezCDY95do .. $DNDN $NAII $VOXX
trunk of loot
24 Jan 15 20:54:00
RT @alldayAHORRE: @CEOBRKB @KSidial @modern_rock @timothysykes look up $VOXX Sykes even apologized to his noobies. thats all u need to see.
Big Poppa Pump
24 Jan 15 20:49:22
@CEOBRKB @KSidial @modern_rock @timothysykes look up $VOXX Sykes even apologized to his noobies. thats all u need to see.
Jake13
24 Jan 15 05:44:42
Stocks Trending Now: http://t.co/j1I70Q28lk $WNARF $VOXX $CSBK $SKVKY $FBVI $GTCDF $ESVIF $EIPC $WIPSL $HGR $SCEG $FORC ~
clayton
23 Jan 15 23:30:16
Stocks Trending Now: http://t.co/2RP342qvZt $PVR $CORFF $ARYC $KYNE $CYVA $RPXC $ADVS $FT $VOXX $MLAB $CDCH $YDWAF ~
FilingsAnalysis
23 Jan 15 12:55:20
$VOXX, 13G filed by Blackrock Inc. http://t.co/8qXYyATCla
$Stocknewsalerts
23 Jan 15 12:31:30
$VOXX New SEC Document(s) for VOXX From our Stock News Alerts App
$Stocknewsalerts
23 Jan 15 12:28:59
$VOXX ALERT: New VOXX International Corporation SEC Filing From our Stock News Alerts App
Stocks News&Markets
23 Jan 15 12:24:02
$VOXX - Amended Statement of Ownership (sc 13g/a) http://t.co/bWQh6929HK
NASDAQ
23 Jan 15 12:23:11
$VOXX - Amended Statement of Ownership (sc 13g/a) http://t.co/9zyyXa03cT
mr13g
23 Jan 15 12:23:10
$VOXX Ammended SC 13G filed by: Blackrock Inc., subject: Voxx International Corp, Percent: 9.0% http://t.co/qP7xndMFFf
Breaking News
23 Jan 15 12:19:09
$VOXX: New SEC Filing for VOXX: Form SC 13G/A, No. 0001086364-15-000816 http://t.co/AHzlqZonj3 http://t.co/HvnUvjZ3UQ
jim50
22 Jan 15 22:23:19
Stocks Trending Now: http://t.co/04PvocSgRU $JAUGF $MNKD $SBMSF $MITSF $NXWI $YUEXF $CIBH $SWWE $IBFL $CENEF $VOXX $BSTK ~
Erik
22 Jan 15 10:10:26
RT @pennystockmemes: http://t.co/aUKYML2oSx <<-- I KNOW, F*CK ME RIGHT??? $VOXX $LAKE http://t.co/l1GTkwG3eV
Spartan Stocks
22 Jan 15 09:27:43
As we get into earnings season remember to give winners a lot of credence as runners, and they hold up for a long time. $VOXX $SWHC $BEBE
TickerChirp
22 Jan 15 03:51:17
Trending Tweets Regarding $VOXX (Voxx International Corp symbol VOXX) on 01/22/2015 http://t.co/2A1r4JC7J8
Timothy Sykes
21 Jan 15 15:00:02
http://t.co/L2CgSXtgmI $7,885 loss $VOXX 9 days ago, see my track record & realtime alerts: http://t.co/vuP7BDFaJ2
ProTradersNews
21 Jan 15 14:41:02
$VOXX: County officials defend Voxx industrial project in Lake Nona: http://t.co/uyzEkM3xmm
mokrari
21 Jan 15 10:44:59
$VOXX 3.0 http://t.co/eGZAUQnghS $NAUH 5.7 http://t.co/hRgmcS51RZ $LNDC 2.0 http://t.co/deWPTtYF4x $SD -2.5 v mkt 1.5 http://t.co/DGxcdfY3i7
George Randolph
21 Jan 15 06:43:43
$VOXX now green on the day, they're still on my w/l for now
ProVesting
21 Jan 15 06:31:06
$VOXX: Tavistock responds to petition against Lake Nona industrial park: http://t.co/UwmlEZUuMg
Equity Killer
20 Jan 15 12:12:12
Nice red/green move in $VOXX looking to see if they can hold it
Spartan Stocks
20 Jan 15 11:20:13
We're seeing some true bread and butter set ups here in earnings season $VOXX $PETS $BEBE $SWHC #SpartanStrategy
Daily Contracts
20 Jan 15 09:51:01
Real-Time feed of company contracts, original agreements and executive updates from Voxx International $VOXX http://t.co/rjMVRFueLK
Wolf Trading
19 Jan 15 20:41:04
$SMSI and $VOXX already started the party but there's plenty more to come
StockNewsWires
19 Jan 15 17:46:02
$PLOW $VOXX: Underperforming Companies for the Week: Douglas Dynamics Inc ... http://t.co/1fGsLMhMDE
Edi Bice
19 Jan 15 11:55:08
RT @mokrari: $VOXX 2.7 http://t.co/eGZAUQnghS $NAUH 2.4 http://t.co/hRgmcS51RZ $LNDC 2.5 http://t.co/deWPTtYF4x $SD 0.8 vs mkt 1.3 http://t…
Daily Contracts
19 Jan 15 11:52:01
Real-Time feed of company contracts, original agreements and executive updates from Voxx International $VOXX http://t.co/rjMVRFueLK
mokrari
19 Jan 15 10:18:06
$VOXX 2.7 http://t.co/eGZAUQnghS $NAUH 2.4 http://t.co/hRgmcS51RZ $LNDC 2.5 http://t.co/deWPTtYF4x $SD 0.8 vs mkt 1.3 http://t.co/DGxcdfY3i7
mokrari
19 Jan 15 05:00:03
Top outperformers rated last 3 days $VII $VOXX $NAUH $LNDC $SD
				
				
  +Follow January 10, 2014 9:16AM
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