4 Small Caps for Growth-Focused Investors

Wall Street likes these fast-growing businesses

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Aug 08, 2022
Summary
  • Centennial Resource Development Inc., Clean Energy Fuels Corp, Chico's FAS Inc. and DiamondRock Hospitality Company may offer good value.
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Investors seeking opportunities among growth stocks could be interested in the following small caps, as they represent companies whose trailing 12-month net income per share has improved significantly on a year-over-year basis.

Wall Street sell-side analysts have also issued positive recommendation ratings for these stocks.

Centennial Resource Development

The first company to consider is Centennial Resource Development Inc. (

CDEV, Financial), a Denver, Colorado-based independent oil and natural gas company focused on the development of crude oil and liquid-rich natural gas reserves located primarily in the Delaware Basin (a sub-basin of the Permian Basin) in the United States. In the Delaware Basin, the company leased or acquired approximately 73,675 net acres at the end of 2021 and owned 991 net mineral acres.

Diluted 12-month earnings per share from continuing operations for the period ended in June were $1.25, reflecting a positive reversal from the loss per share of 72 cents the company suffered in the year-ago period.

The share price ($6.47 per share as of Aug. 5) is up a significant 38.54% year over year, with a 52-week range of $3.90 to $9.70 and a market cap of approximately $1.84 billion.

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Currently, Centennial Resource Development does not pay dividends.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $9.82 per share.

Riverstone Holdings LLC is the company's largest top fund holder with 24.16% of outstanding shares. State Street Corp. is the second-biggest fund holder with 6.47%, while the SPDR S&P Oil & Gas Exploration & Production ETF follows in third place with 5.14% of the company's outstanding shares.

Clean Energy Fuels Corp

The second stock to consider is Clean Energy Fuels Corp. (

CLNE, Financial), a Newport Beach, California-based provider of compressed, liquefied and renewable natural gas for medium- and heavy-duty trucks in North America. The company also offers operation and maintenance services for customer stations of public and private vehicle fleets.

Though it still turns a net loss, the company's bottom line has improved over the past year. Indeed, for the trailing 12-month period ended in the most recent quarter, the company reported a net loss of 20 cents per diluted share versus a net loss of 46 cents per diluted share in the period ended June 2021.

The share price ($7.57 per share as of Aug. 5) is down 2.82 year over year, with a 52-week range of $4.02 to $9.69 and a market cap of approximately $1.82 billion.

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Currently, Clean Energy Fuels does not pay dividends.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $12.89 per share.

Jeremy Grantham (Trades, Portfolio) is the company's largest top shareholder with 7.39% of outstanding shares. BlackRock Inc. is the second-largest top fundholder with 6.03%, while State Street Corp. is the third-largest top fundholder with a 4.76% stake.

Chico's FAS Inc.

The third company to consider is Chico's FAS Inc. (

CHS, Financial), a Fort Myers, Florida-based omnichannel retailer of private brand women's casual wear, intimates and accessories. It operates under the Chico's, White House Black Market and Soma brands. The company operated 1,266 stores in the United States, Puerto Rico and the U.S. Virgin Islands at the end of 2021. It also operated 59 international franchise locations in Mexico and two locations in domestic airports. The company also sells its products through its online channel.

Diluted earnings from continuing operations for the trailing 12-month period ended April 29 was 72 cents per share. This reflected a positive reversal from the diluted net loss of $1.64 per share the company suffered in the same period last year.

The stock price ($5.91 per share on Aug. 5) has risen by 2.29% over the past 52 weeks, ranging between $3.80 and $7.19 per share. The stock has a market cap of approximately $776.51 million.

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Currently, Chico's FAS Inc. doesn’t pay dividends.

On Wall Street, the stock has a median recommendation rating of hold with an average target price of $5.50 per share.

BlackRock Inc. is the company's largest top fund holder with 15.67% of outstanding shares, followed by the iShares Core S&P Small-Cap ETF with 7.01%, and Vanguard Group Inc. with 6.53%.

DiamondRock Hospitality Company

The fourth company to consider is DiamondRock Hospitality Company (

DRH, Financial), a Bethesda, Maryland-based self-advised real estate investment trust that owns premium hotels that are geographically diversified but concentrated on top gateway markets and destinations. These hotels are either operated under leading global brand families or unique boutique hotels in the lifestyle segment.

Diluted earnings from continuing operations for the trailing 12-month period ended June 30 were 23 cents per share. This reflected a positive reversal from the diluted net loss of $2.35 per share the company suffered in the same period last year.

The stock price ($9.15 per share on Aug. 5) increased 6.78% year over year for a 52-week range of $7.68 to $11.15 and a market cap of around $1.959 billion.

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The company has reintroduced its quarterly dividend after being suspended in 2020. On Oct. 12, the company will pay 3 cents per common share, resulting in a forward dividend yield of 1.29% as of this writing.

On Wall Street, the stock has a median recommendation rating of hold with an average target price of $10.50 per share.

BlackRock Inc. is the company's largest top fund holder with 19.12% of outstanding shares. Vanguard Group Inc. is the second-biggest top fund holder with 16.47%, while the iShares Core S&P Small-Cap ETF follows in third place with 7.15%.

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Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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