When making an investment decision, it’s easy to start doubting your ability to make choices. You could be using inaccurate information, a poorly constructed valuation model, or a number of different error-filled factors. How can you be a little more sure of your investment then?
It might be helpful to have the backup of a large investment bank’s analysts. Their full-time job is to analyze companies, so their word is as professional as it gets. They often have personal relationships with the companies they are assigned to, and visit the company to get more accurate figures out their value.
Business Section: Investing Ideas
We screened small cap stocks stocks for “buy” or “overweight” ratings from reputable analyst groups which include Barclays, Argus, Deutche, Canacord Genuity, Needham and Collin Stewart. This means that the investment banks believes these stocks are good buys at the moment.
Another encouraging characteristic accompanying these stocks is that they all show positive accounts receivable trends. Receivable trends are encouraging because it helps to gauge whether the quality of sales, not just the quantity, is increasing over time.
More on receivables: Receivables are payments not yet collected on, and there is no absolute guarantee that they will be collected. Our screen takes into account that revenues are increasing while outstanding payments due to the firm are being paid off more and more quarter to quarter. This means that the revenue coming in to a firm is healthier as more customers pay their bills in full.
So what do you think? Did analysts make a good call on rating these stocks “Buy”/”Overweight”?
On average, analysts agree with the “buy” ratings for these names. For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
List sorted alphabetically.
1. magicJack VocalTec Ltd. (CALL, Earnings, Analysts, Financials): Market cap at $512.3M, most recent closing price at $26.42. Net institutional purchases in the current quarter at 1.7M shares, which represents about 20.09% of the company’s float of 8.46M shares. Revenue grew by 33.8% during the most recent quarter ($38.56M vs. $28.82M y/y). Accounts receivable grew by -32.93% during the same time period ($7.82M vs. $11.66M y/y). Receivables, as a percentage of current assets, decreased from 18.15% to 11.46% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30). On 01/31/2012, Oppenheimer had a Outperform rating on the stock.
2. Chefs’ Warehouse Holdings LLC (CHEF, Earnings, Analysts, Financials): Engages in the distribution of specialty food products in the United States. Market cap at $329.65M, most recent closing price at $15.89. Net institutional purchases in the current quarter at 1.0M shares, which represents about 9.02% of the company’s float of 11.09M shares. Revenue grew by 15.7% during the most recent quarter ($114.83M vs. $99.25M y/y). Accounts receivable grew by 9.17% during the same time period ($44.19M vs. $40.48M y/y). Receivables, as a percentage of current assets, decreased from 61.97% to 55.67% during the most recent quarter (comparing 13 weeks ending 2012-06-29 to 13 weeks ending 2011-06-24). On 09/07/2011, Canaccord Genuity had a Buy rating on the stock.
3. Heritage-Crystal Clean, Inc (HCCI, Earnings, Analysts, Financials): Provides industrial and hazardous waste services to small and mid-sized customers in the United States. Market cap at $350.72M, most recent closing price at $19.36. Net institutional purchases in the current quarter at 2.8M shares, which represents about 31.32% of the company’s float of 8.94M shares. Revenue grew by 94.78% during the most recent quarter ($62.27M vs. $31.97M y/y). Accounts receivable grew by 50.94% during the same time period ($25.72M vs. $17.04M y/y). Receivables, as a percentage of current assets, decreased from 37.58% to 23.77% during the most recent quarter (comparing 13 weeks ending 2012-06-16 to 13 weeks ending 2011-06-18). On 02/24/2012, Needham had a Buy rating on the stock.
4. Tangoe, Inc. (TNGO, Earnings, Analysts, Financials): Provides on-demand communications lifecycle management (CLM) software and related services to enterprises, including large and medium-sized businesses and other organizations. Market cap at $533.59M, most recent closing price at $14.31. Net institutional purchases in the current quarter at 6.2M shares, which represents about 18.98% of the company’s float of 32.67M shares. Revenue grew by 39.19% during the most recent quarter ($36.26M vs. $26.05M y/y). Accounts receivable grew by 27.03% during the same time period ($26.69M vs. $21.01M y/y). Receivables, as a percentage of current assets, decreased from 66.89% to 24.72% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30). On 09/06/2011, Oppenheimer had a Outperform rating on the stock. On 09/06/2011, Deutsche Bank had a Buy rating on the stock.
Ratings sourced from Reuters, institutional data sourced from Fidelity, accounting data from Google, all other data sourced from Finviz.
Use Kapitall’s Tools: Looking for ways to analyze this list?
Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall’s tab navigation to browse through the data…
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- magicJack VocalTec Ltd. (CALL, Chart, Download SEC Filings)
- Chefs’ Warehouse Holdings LLC (CHEF, Chart, Download SEC Filings)
- Heritage-Crystal Clean, Inc (HCCI, Chart, Download SEC Filings)
- Tangoe, Inc. (TNGO, Chart, Download SEC Filings)
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Ratings sourced from Reuters, institutional data sourced from Fidelity, accounting data from Google, all other data sourced from Finviz.
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