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Six Small-Cap Stars Backed by Both Analysts and Wall Street

Given the improbable but spectacular year that 2013 was for stocks, the lackluster opening to 2014 has begun to create serious jitters on Wall Street. While the most bearish scenario is by no
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.

Given the improbable but spectacular year that 2013 was for stocks, the lackluster opening to 2014 has begun to create serious jitters on Wall Street. While the most bearish scenario is by no means a guarantee, investors would do well to have a contingency plan on deck in the event that things get any uglier.

Excluding the most disastrous outcomes, however, investors should not allow the events of January to deter them from looking for growth opportunities, especially since Equities.com’s Small-Cap Stars screener was designed precisely for this purpose.

This can be demonstrated using any sector of the economy, even Materials companies who are projected to take a hit from, among other things, a Chinese economy that is cooling its heels, and oversupply in commodities ranging from iron-ore to natural gas.

The small-cap space in general is a notoriously difficult one, especially for the self-directed stock-picker. Analysts, hedge funds, and other financial institutions have the money and the knowledge conduct the kind of research that DIY investors can usually only dream of. When looking for prospects, then, it can be a good idea to take a look at what they are doing.

The following six Basic Materials companies have been selected from Equities.com’s Small-Cap Stars index, based on the fact they each have an average analyst rating of “buy or better” (analyst ratings are averaged on a scale from 1 to 5, with 1 being a “strong buy” and 5 being a “strong sell”), as well as a high level of institutional ownership (over 90 percent).

Furthermore, these stocks have all been on an upward trajectory over the past six months.

PolyOne Corporation (POL)

Industry: Specialty Chemicals

Market-Cap: $3.33 billion

Price: $34.41

Institutional Ownership: 92.90 percent

Average Analyst Recommendation: 2

Six-Month Return: +18.75 percent

Stone Energy Group (SGY)

Industry: Independent Oil & Gas

Market-Cap: $1.43 billion

Price: $29.38

Institutional Ownership: 98.20 percent

Average Analyst Recommendation: 2

Six-Month Return: +16.15 percent

OM Group Inc. (OMG)

Industry: Specialty Chemicals

Market-Cap: $994.82 million

Price: $31.65

Institutional Ownership: 99.80 percent

Average Analyst Recommendation: 2

Six-Month Return: +0.29 percent

Tesco Corporation (TESO)

Industry: Oil & Gas Equipment & Services

Market-Cap: $795.98 million

Price:  $20.37

Institutional Ownership: 91.80 percent

Average Analyst Recommendation: 2.3

Six-Month Return: +52.58 percent

Gibraltar Industries Inc. (ROCK)

Industry: Steel & Iron

Market-Cap: $546.51 million

Price: $17.66

Institutional Ownership: 94.10 percent

Average Analyst Recommendation: 2.3

Six-Month Return: +24 percent

 

Northwest Pipe Co. (NWPX)

Industry: Steel & Iron

Market-Cap: $312.95 million

Price: $33.13

Institutional Ownership: 91 percent

Average Analyst Recommendation: 1.8

Six-Month Return: +12.50 percent