Small Cap Stars: Five-Star Tech Companies

Joel Anderson  |

Our Small-Cap Stars profiles small-cap companies that have real potential based on their balance sheets and industry outlooks. We here at Equities have put together a series of fundamentals that we believe point towards a strong potential for big returns. It’s no guarantee, but the portfolio as a whole has grown over 30 percent so far this year, outpacing the S&P 500’s 21 percent return so far in 2013.

Looking at the tech sector, we highlighted ratios like Enterprise Value/EBIT and Reinvetment Rate among others as numbers to watch when examining small-cap tech stocks. Now, based on the five criteria we laid out, here’s five of the tech companies that earned five stars based on our screener.

Market Cap: $1.03 Billion

YTD Gain: 54.19 percent

Sunnyvale, CA’s Applied Micro Circuits Corporation has been creating computing and connectivity solutions for data centers and service providers since it incorporated in 1987. The company’s current offerings include a variety of cloud computing solutions, such as the X-GeneTM, a Server class ARM 64-bit processor.

Market Cap: $1.83 Billion

YTD Gain: 70.66 percent

InvenSense designs and fabricates mico-electro-mechanical systems (MEMS) technology based on an integrated circuit (IC) that uses motion sensors like gyroscopes. The San Jose company made a splash earlier this week, acquiring microphone-maker Analog Devices (ADI) for $100 million in cash.

Market Cap: $640.35 Million

YTD Gain: 84.87 percent

Houston’s RigNet has been providing network infrastructure for the remote communications needs in the oil and gas industry since incorporating in 2004.

Market Cap: $692.87 Million

YTD Gain: 66.93 percent

It’s hard to imagine anything involving postal delivery making money, but appears to have found a winning solution. An internet-based postal solution, the El Segundo, CA company allows users to print USPS-approved postage for shipping packages and mailing letters.

Market Cap: $1.83 Billion

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YTD Gain: 60.73 percent

Santa Clara, CA-based Synaptics was originally founded as a neural network research company in 1986, but it’s now focused on developing human interface solutions for major consumer electronics companies, including Apple (AAPL) , Dell (DELL) , and Sony (SNE) . Synaptics made a move last week when it purchased Validity Sensors, a maker of biometric fingerprint authentication solutions, for $92.5 million in cash and stock.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of 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:

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