Small Cap Stocks with High Profitability

 By: on Jun 20,2012 Posted in Investment Ideas ,Premium ,Small Cap Ideas
Share |
We're on   

Though small cap be defined in many ways, generally it is a company with a market capitalization of less than $2 billion. One of the main advantages of investing in these stocks is the opportunity to beat institutional investors as mutual funds have restrictions that limit them from buying large portions of any one issuer’s outstanding shares, and many individual investors don’t want to put a lot of money in stock market. Keeping this in mind, we run a screener for small cap stocks. We have selected stocks with market cap of less than $2 billion.

Small cap stocks are considered more volatile. To overcome this risk we have chosen stocks with high profitability. Profitability means yielding a financial profit or gain. In order to be feasible and attractive to investors, we screened stocks generating noteworthy profit as they are maintaining their positive earnings per share (EPS), sales growth, and return on investment (ROI) and most importantly maintaining good profit margin.

The below discussed stocks not only maintain good profitability but also are paying high dividend to their shareholders.

CYS Investments Inc (NYSE:CYS)
CYS Investments Inc. is a specialty finance company created with the objective of achieving consistent risk-adjusted investment income. It yielded a net profit margin of 120.08% and its operating margin was 81.96%. Its earnings per share were $1.37.

The company’s price to earnings ratio stands at 10.35, while CYS Investments Inc generated 2.77% return on assets, 9.17% return on equity and its return on investments was 3.82% which shows strong financial position of the firm. It paid 14.10% dividend to its shareholders.

CYS Investments Inc (NYSE:CYS) surged 0.14% and closed at $14.18 with the total traded volume of 2.89 million shares during the last trading session.

Prospect Capital Corporation (NASDAQ:PSEC)
Prospect Capital Corporation’s earnings per share grew by+316.45% this year, while return on assets was 11.51%, return on equity was 16.27% and PSEC generated 12.62% return on investments as its net profit margin boosted to 69.82%.

Prospect Capital Corporation’s operating margin was 55.59% and its price to earnings ratio ended at 6.80. Company also paid dividend of 10.73% to its shareholders.

Prospect Capital Corporation (Prospect Capital) is a financial services company that lends to and invests in middle market privately-held companies. In last trading session, its closing price was $11.36, while no percentage change has been seen and its total traded volume was 1.55 million shares.

Intersil Corp (NASDAQ:ISIL)
Intersil Corp (NASDAQ:ISIL) earned 3.13% return on assets, 4.68% returns on equity and 3.43% return on investments as its profit surged to 6.93%. Company’s operating margin was 6.86% and it gained 3.13% return on assets, 4.68% returns on equity with 3.43% increase in return on investment.

This year, ISIL earnings per share soared to 151.66% and its price to earnings ratio ended at 27.20. In the recent quarter its dividend was 4.49%.

Medical Properties Trust, Inc. (NYSE:MPW)
Medical Properties Trust Inc. operates as a real estate investment trust (REIT) in the United States. MPW earnings per share grew to +85.89% this year with the net profit margin of 12.74% and operating margin of 54.19%.

Medical Properties Trust return on assets was 1.10%, return on equity was 1.87%, and its return on investments was 1.17%. It paid 8.85% dividend to its shareholders.

Disclosure: Opinions expressed in this article are those of the authors alone who have no stake in any stocks mentioned, and did not plan to acquire any stake within the next 72 hours.



Leave a Reply