3 Unloved Small-Caps to Consider Today: QLogic Corporation (QLGC) and More

Grab yield from this pet-friendly small-cap

Petmed Express Inc (NASDAQ:PETS) , and its subsidiaries, doing business as 1-800-PetMeds, markets prescription and non-prescription pet medications, health products, and supplies for dogs and cats in the United States. This stock isn’t nearly as discounted as the two previously mentioned stocks above (with a P/E of around 16)- but trades in a relatively tight range and offers investors a nice dividend that yields about 4.6%. The company also sports a strong balance sheet, no debt, and holds about $45 million in cash. A current ratio of around 8 is also impressive. One thing to keep in mind before considering an investment in this high-yielder, however, is the fact that about 28% of the stock’s float is being shorted.

The bottom line

Small-caps can be more exciting and can even potentially provide more upside than their larger counterparts, but usually carry more risk as well. They usually require more monitoring than a more recognizable stock, and often have way less analyst and media coverage- which can make monitoring them that much more difficult. Still, if financially strong, fundamentally sound, and/or recently upgraded due to brighter prospects, small-cap companies shouldn’t necessarily be completely avoided. If Mr. Market is offering smaller (and possibly riskier) companies for the cheap simply because he doesn’t know much about them, more patient, research-inclined investors may be able to hold them until the market realizes their true intrinsic value. The stocks mentioned above are small-caps with solid balance sheets or companies with increased earnings potential that seem to get little attention from investors, but one day they may receive said attention along with capital appreciation- especially on earnings beats or any other catalysts capable of creating knowledge of their presence in the market.

All financial data and company profiles obtained from Yahoo Finance

The article 3 Unloved Small-Caps to Consider Today originally appeared on Fool.com and is written by Joseph Harry.

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