David Abrams’ Top Small-Cap Picks: Lamar Advertising Co (LAMR), Clear Channel Outdoor Holdings, Inc. (CCO)

Abrams’ third favorite small-cap stock is Wesco Aircraft Holdings Inc (NYSE:WAIR). As its name suggests, Wesco Aircraft Holdings is a holding company for Wesco Aircraft Hardware. The company provides services related to supply chain management to many clients throughout the global aerospace industry. The holding company has beaten Wall Street’s earnings expectations in two consecutive quarters, but still trades at a paltry forward multiple below 10x. There’s not a lot of analyst coverage on WAIR—Imperial Capital and Robert W. Baird are the most prominent—but on average, the consensus is that the stock has a 20% upside from current levels ($13.15).

Joining Abrams in Wesco Aircraft last filing period were a few notable hedge fund managers, including Chuck Royce, Howard Guberman and Ken Griffin. Griffin is the manager of mega-fund Citadel Investment Group (see all of Ken Griffin’s top stock picks here).

Last but certainly not least, Abrams’ fourth and final small-cap pick is Clear Channel Outdoor Holdings, Inc. (NYSE:CCO). Clear Channel operates in the same bullish ad space as Lamar and CBS Outdoor, a division of CBS Corporation (NYSE:CBS).

While it’s tempting to consider Clear Channel on equal ground compared to Lamar—at least in terms of exposure to a shift to digital billboard ads—there’s one other growth driver at play here. Clear Channel Airports, which operates within CCO, has quite the opportunity with ClearVision. ClearVision is what the company’s calling its novel in-airport TV technology.

The Louis Armstrong New Orleans International Airport will be the first location outfitted with ClearVision, but it’s worth noting that if the program is successful, investors can expect other airports to follow. The sell-side expects earnings growth to average 8-9% over the next five years, above the likes of Lamar, but below CBS. Still, at a mere 4.7 times its cash—Lamar trades at 100.5x and CBS is at 25.4x—we can see why it is an integral part of David Abrams’ portfolio.

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