5 Most Profitable Small-Cap Stocks Now

In this article, we will look at the 5 most profitable small-cap stocks now. If you want to explore similar stocks, you can go to 15 Most Profitable Small-Cap Stocks Now.

5. CONSOL Energy Inc. (NYSE:CEIX)

Number of Hedge Fund Holders: 31

Net Income (TTM) as of December 31, 2022: $466.9 million

CONSOL Energy Inc. (NYSE:CEIX) is a leading manufacturer and exporter of bituminous coal. The company operates through two segments: Pennsylvania Mining Complex and CONSOL Marine Terminal. As of February 17, the stock has gained 87.26% over the past 12 months.

CONSOL Energy Inc. (NYSE:CEIX) is one of the most profitable small-cap stocks right now. On February 7, the company reported strong earnings for the fiscal fourth quarter of 2022. The company reported an EPS of $3.88 and outperformed EPS consensus by $0.47. For fiscal 2022, CONSOL Energy Inc. (NYSE:CEIX) generated a net income of $466.9 million, up from $34.1 million in fiscal 2021.

At the end of the third quarter of 2022, 31 hedge funds were eager on CONSOL Energy Inc. (NYSE:CEIX) and held collective stakes of $360.6 million in the company. As of December 31, David Einhorn’s Greenlight Capital is the most prominent investor in the company and has a position worth $117.8 million.

Here is what Greenlight Capital had to say about CONSOL Energy Inc. (NYSE:CEIX) in its fourth-quarter 2022 investor letter:

“As CONSOL Energy Inc. (NYSE:CEIX) rode a surge in coal prices, the shares soared from $22.71 to $65.00 and the company paid $2.05 per share in dividends. In 2022, part of the higher coal prices were absorbed by hedges and forward contracts at what turned out to be below-market prices. Even so, we believe the company ended the year with no net debt. From here, with the below market contracts mostly behind, we expect the higher prices to translate directly into much higher earnings, with most of the free cash flow to be returned to shareholders. Much of the pricing in 2023 and some of the pricing in 2024 is locked in. As a result, we believe that the company will generate free cash flow over the next two years equal to its current market capitalization. While thermal coal will probably never be cool to own, we believe the returns for owning CEIX should continue to be hot.”

4. M/I Homes, Inc. (NYSE:MHO)

Number of Hedge Fund Holders: 26

Net Income (TTM) as of December 31, 2022: $490.6 million

M/I Homes, Inc. (NYSE:MHO) is an American homebuilding company. The company has four business segments: Northern Homebuilding, Southern Homebuilding, and Financial Services. As of February 17, M/I Homes, Inc. (NYSE:MHO) has returned 21.64% to investors over the past 6 months.

On February 1, M/I Homes, Inc. (NYSE:MHO) posted earnings for the fourth quarter of fiscal 2022. The company reported earnings per share of $5.15 and outperformed EPS expectations by $0.99. For fiscal 2022, M/I Homes, Inc. (NYSE:MHO) generated a net income of $490.6 million. The stock ranks fourth among the most profitable small-cap stocks.

M/I Homes, Inc. (NYSE:MHO) was spotted on 26 investors’ portfolios at the end of Q3 2022. The total stakes of these hedge funds amounted to $109.7 million. As of December 31, Balyasny Asset Management is the largest shareholder in the company with a stake worth $23.8 million.

Here is what Miller Value Partners had to say about M/I Homes, Inc. (NYSE:MHO) in its fourth-quarter 2022 investor letter:

“During the quarter, we initiated a new investment in M/I Homes, Inc. (NYSE:MHO), what we deem as a significantly misplaced homebuilder. M/I Homes’ share price is 40% below its recent highs, at valuation levels near/below 2008-09 and 2020 industry troughs. Homebuilders in general have been under pressure due to marketplace concerns on the potential impact from higher mortgage rates and lower housing affordability. However, we believe the positive demographics and lack of housing supply over the page 10 years provides a very favorable long-term supply/demand picture for the industry that should shorten the current downturn. M/I Homes is nicely diversified covering multiple home-type categories, with properties in valuable local communities in the Midwest and Southeast (#2 in the Jon Burns Real Estate Consulting Submarket Desirability Index). The company appears well positioned with a strong land portfolio and a backlog that remains higher than 2019 levels. M/I Homes also has a strong balance sheet, with net debt to capital near 25% and no debt maturities through 2028. With their strong backlog, management still sees potential for Return on Equity to remain above 20% which, if achieved, would lead to strong tangible book value growth over the next couple of years. With market expectations and valuation near historical troughs (EV/Revenue <.5x, EV/EBIT near 3x and deep discount to tangible book value), the  share price is already discounting a deep and extended industry trough. M/I Homes’ attractive asset base, strong balance sheet and deep valuation discount to peers should provide an attractive long-term reward/risk investment opportunity.”

3. Costamare Inc. (NYSE:CMRE)

Number of Hedge Fund Holders: 9

Net Income (TTM) as of December 31, 2022: $523.8 million

Costamare Inc. (NYSE:CMRE) is one of the world’s leading marine shipping companies and is currently trading cheaply relative to earnings. As of February 17, Costamare Inc. (NYSE:CMRE) has a TTM PE ratio of 2.38 and has gained 8.34% year to date. Costamare Inc. (NYSE:CMRE) is placed high on our list of the most profitable small-cap stocks. The company’s net income as of December 31, 2022, amounted to $523.8 million, up from $404 million in fiscal 2021.

Costamare Inc. (NYSE:CMRE) was a part of 9 investors’ portfolios at the close of Q3 2022. The total stakes of these hedge funds amounted to $28.4 million. As of December 31, Citadel Investment Group is the leading shareholder in the company and has disclosed a stake worth $4.69 million.

2. Century Communities, Inc. (NYSE:CCS)

Number of Hedge Fund Holders: 18

Net Income (TTM) as of December 31, 2022: $525.1 million

Century Communities, Inc. (NYSE:CCS) is an American homebuilding corporation, specializing in single-family attached and detached homes. On February 8, Century Communities, Inc. (NYSE:CCS) declared a quarterly cash dividend of $0.23 per share, up 15% from its prior dividend of $0.20. The dividend is payable on March 15 to investors of record at the close of business on March 1. As of February 17, the stock is offering a forward dividend yield of 1.53%.

On February 1, Century Communities, Inc. (NYSE:CCS) reported market-beating earnings for the fiscal fourth quarter of 2022. The company’s EPS for the quarter amounted to $2.71 and outperformed EPS estimates by $0.28. For fiscal 2022, Century Communities, Inc. (NYSE:CCS) generated a net income of $525.1 million, up from $498.5 million in fiscal 2021.

At the close of Q3 2022, 18 hedge funds were long Century Communities, Inc. (NYSE:CCS) and disclosed position worth $62.2 million in the company. As of December 31, Balyasny Asset Management is the top investor and has a position worth $28.1 million in the company.

1. Danaos Corporation (NYSE:DAC)

Number of Hedge Fund Holders: 15

Net Income (TTM) as of December 31, 2022: $559.2 million

Danaos Corporation (NYSE:DAC) is the most profitable small-cap marine shipping company on our list. The company has operations in Australia, Asia, Europe, and the United States. For fiscal 2022, the company’s net income amounted to $559.2 million. As of February 17, the stock has gained 11.43% year to date and is trading at a PE multiple of 2x.

On February 14, Danaos Corporation (NYSE:DAC) declared a quarterly dividend of $0.75 per share. The dividend is payable on March 14 to stockholders of record on February 28. As of February 17, the stock is offering a forward dividend yield of 5.03%.

At the close of the third quarter of 2022, 15 hedge funds held stakes in Danaos Corporation (NYSE:DAC). The total value of these stakes amounted to $127.6 million. As of December 31, Balyasny Asset Management is the largest shareholder in the company and has a position worth $25.1 million.

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