Jamie Zimmerman’s Best Stock Picks: Macquarie Infrastructure Company (MIC), Theravance Inc (THRX)

Next up we have Theravance Inc (NASDAQ:THRX), the biopharmaceutical company that is already up over 10% year to date. Much of the optimism surrounding Theravance at the moment is related to its partnership with GlaxoSmithKline plc (NYSE:GSK). The duo recently announced that they are seeking approval of a drug used to alleviate symptoms of chronic obstructive pulmonary disease, called Anoro. The two companies are also partnering to develop several other related programs, and in general, investors have much to be excited about concerning their efforts in the respiratory arena.

From a valuation standpoint, both stocks’ paths are mixed. Theravance trades at 8.4 times its cash, while GSK sports a P/C multiple of 18.4x. THRX’s sales multiple is near 17x, though, while GlaxoSmithKline is almost one-fourteenth as expensive. Book multiples also side with GSK, and its 5.3% dividend certainly adds to its allure. Still, Theravance has been a much hotter stock in recent months, and has the most to gain from an approval of Anoro and the rest of its drugs in development.

Zimmerman’s third—and final—small-cap stock at the end of the last filing period was Ralcorp Holdings, Inc. (NYSE:RAH). The food processing company was bought out by ConAgra Foods, Inc. (NYSE:CAG) late last year, for close to $7 billion after debt. Generally speaking, the most attractive aspect of Ralcorp’s business was its private-label portfolio, which has done well in a muted economic recovery.

After the deal, Ralcorp and ConAgra’s private-label business will now be the largest in North America, with annual sales in excess of $4 billion from this segment alone. ConAgra’s total sales are estimated to fall between $17 billion and $20 billion annually, and the stock currently trades at a trailing P/S below 1.0.

The sell-side expects the company’s bottom line to sport growth of 8-9% a year over the next half-decade, more than double the expansion it has seen since 2008. With a projected dividend yield above 3.0%, ConAgra is the rare stock that pleases both income and growth-oriented investors.

To see more details about how to beat the market using Insider Monkey’s small-cap strategy, check it out here.

For more related coverage, check out these articles:

Litespeed Management Is Having a Great 2012

This Hedge Fund Thinks Diamond Foods is Set For a Turnaround

Jamie Zimmerman’s Special Situations Plays

Disclosure: I have no positions in any of the stocks mentioned in this article