Pushed by the ongoing expansion of the U.S. economy, with gross domestic product expected to have hit a 2% annualized gain in the final quarter of 2019, the Russell 2000 Index climbed 13% to $1,658.31 per share over the past year through Tuesday, Jan. 28. The Russell 2000 is used as a benchmark for small-cap U.S.-listed companies, which have a market capitalization ranging between $300 million and $2 billion.
For 2020, the share prices of U.S.-listed small caps will likely continue to increase with their earnings due to increased consumer spending.
Thus, investors may want to consider the following small caps, which posted a robust rise in their last 12-month earnings per share without non-recurring items of 25% or more.
TTEC Holdings
The first company that meets the above-listed criteria is TTEC Holdings Inc (TTEC, Financial), an Englewood, Colorado-based customer experience technology and services company with a market capitalization of around $1.92 billion.
TTEC has grown its trailing 12-month earnings per share without non-recurring items by 381.3%, pushing the share price higher 25% over the past year. The stock was trading at a price of $41.10 per share on Wednesday, below the 200- and 100- day simple moving average lines but above the 50-day simple moving average line.
The stock has a price-earnings ratio of 27.64 versus the industry median of 26.51 and a price-sales ratio of 1.19 versus the industry median of 2.26.
For 2020 and the next five years, Wall Street analysts forecast annual EPS growth of 9.60% and 11.25%, respectively. Six sell-side analysts issued a buy rating, while one sell-side analyst suggests holding shares of TTEC Holdings Inc. The average target price is $54.17 per share.
GuruFocus assigned a positive financial strength rating of 6 out of 10 and a high profitability rating of 8 out of 10 to the company.
TTEC Holdings Inc currently pays a semi-annual dividend of 32 cents per common share.
Spirent Communications
The second company that meets the above-listed criteria is Spirent Communications PLC ADR (SPMYY, Financial), a British provider of solutions to develop devices and equipment and to operate networks worldwide. Its stock has a market capitalization of about $1.86 billion.
Spirent Communications reported 89.5% growth in its trailing 12-month earnings per share without non-recurring items. On the tailwinds of this, the stock has risen 54% in the past year to trade above the 200-, 100- and 50-day simple moving average lines. The share price was trading at $12.20 on Wednesday.
For 2020 and 2021, analysts forecast nearly EPS growth of 40% and about 47.2%, respectively. Wall Street sell-side analysts recommend a hold rating for this stock with an average target price of $11.70.
GuruFocus assigned a high rating of 8 out of 10 for the company’s financial strength and its profitability.
Spirent Communications PLC pays a semi-annual dividend of 7.8 cents per common share.
Kadant
The third company that meets the above-listed criteria is Kadant Inc (KAI, Financial), a Westford, Massachusetts-based supplier of equipment and critical components that are used in industrial processes such as papermaking, paper recycling, recycling and waste management. The stock has a market capitalization of approximately $1.22 billion.
Kadant has grown its trailing 12-month earnings per share without non-recurring items by 92.7%. As a result, the share price rose 28% in the past year to above the 200-, 100- and 50-day simple moving average lines. The share price was trading at $108.80 on Wednesday.
The stock has a price-earnings ratio of 20.16 versus the industry median of 18.52 and a price-sales ratio of 1.81 compared to the industry median of 1.05.
For 2020 and the following five years, sell-side analysts predict that Kadant Inc will increase its annual EPS by 11.6% and by 8%, respectively. Three sell-side analysts have issued recommendation ratings on shares of Kadant Inc, consisting of a strong buy, a buy and a hold rating with an average price target of $106.33 per share.
GuruFocus assigned a moderate financial strength rating of 5 out of 10 and a high profitability rating of 8 out of 10 to the company.
Kadant Inc currently pays a quarterly dividend of 23 cents per common share.
Disclosure: I have no positions in any securities mentioned.
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