The NASDAQ composite index’s 32 percent year-to-date advance in 2013 brought it on Monday morning to just shy of 4,000 points for the first time since the dotcom bubble, and companies listed on the exchange are trading for an average of 24.6 times earnings.
Indeed, equities have prevailed against a number of economic and political headwinds throughout the year, upholding an unlikely and spectacular bull market whose behavior has so far shrugged off most of the talk about the inevitable correction.
But with everyone throwing money into stocks, shrewd investors will no doubt be looking farther afield for potential growth opportunities that have yet to be saturated by the increased enthusiasm surrounding equities markets.
Small-cap basic materials companies offer the kind of unglamorous and difficult investments that, if chosen correctly, can provide solid returns that come from solid fundamentals rather than sentiment. The following four small-cap stocks have been selected from various industries in the materials sector, based on a low price/earnings ratio, suggesting that they have been overlooked by the broader market, as well as a year-to-date return of greater than 100 percent.
American Pacific Corp. (APFC)
Industry: Specialty Chemicals
Market-Cap: $312.17 million
Price: $39.94
P/E: 11.92
Performance YTD: +158.68 percent
Hi-Crush Partners LP (HCLP)
Industry: Industrial Metals & Minerals
Market-Cap: $456.31 million
Price: $32.61
P/E: 10.98
Performance YTD: +136.13 percent
Renewable Energy Group Inc (REGI)
Industry: Oil & Gas Refining and Marketing
Market-Cap: $418.7 million
Price: $13.38
P/E: 8.36
Performance YTD: +128.33 percent
Green Plains Renewable Energy (GPRE)
Industry: Specialty Chemicals
Market-Cap: $477.53 million
Price: $15.81
P/E: 9.47
Performance YTD: +100.38 percent
