3 Top Rated Small-Cap Stocks to Buy Right Now

Although the S&P 500 and Nasdaq ended a choppy session higher yesterday, rising retail sales as the holiday season approaches, declining unemployment, and increasing consumer spending should keep the stock market upbeat in the near term. President Biden’s commitment to monitor inflation and expected earnings growth of more than 20% for Q4 2021 should also support the stock market.

Furthermore, the Federal Reserve has left interest rates at near-zero. Because low-interest rates make access to capital easier for small companies, they benefit in a low-interest-rate environment. The continuing economic recovery should also help small-cap stocks expand their market reach. Investors’ interest in small-cap stocks is evident in the Dow Jones U.S. small-cap total stock market index’s 33.7% returns over the past year.

Therefore, we think it could be wise to bet on small-cap stocks Preformed Line Products Company (PLPC), Gran Tierra Energy Inc. (GTE), and Civeo Corporation (CVEO), which possess strong financials. These stocks are rated ‘Strong Buy’ in our proprietary rating system.

Preformed Line Products Company (PLPC)

With a market capitalization of $334.32 million, PLPC, in Mayfield Village, Ohio, is a global designer, manufacturer, and supplier of cable anchoring and control hardware and systems, fiber optic and copper splice closures, and high-speed, cross-connect devices. The company’s core markets are divided into four categories: communications; energy; special industries; and solar. It markets its products through a direct sales force, as well as through manufacturing representatives.

In August, PLPC unveiled updated brand platforms that focus on the company's commitment to providing precision-engineered solutions, quality products, and unparalleled service. The company began to use “PLP” as the primary brand name and introduced several new visual identity elements to complement the new platform.

PLPC’s net sales increased 6.2% year-over-year to $135.38 million in the third quarter ended September 30, 2021. The company’s gross profit came in at $43.16 million. Its operating income amounted to $13.08 million. Also, its net income was $10.7 million during the period. PLPC has gained 12.9% in price over the past year.

PLPC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

Also, the stock has an A grade for Value and Stability. We have also graded PLPC for Quality, Sentiment, Momentum, and Growth. Click here to access all PLPC’s ratings.

PLPC is ranked #7 of 90 stocks in the B-rated Industrial - Equipment industry.

Click here to check out our Industrial Sector Report for 2021

Gran Tierra Energy Inc. (GTE)

Incorporated in 2003, GTE is a Calgary, Canada-based company. Along with its subsidiaries, the company is engaged in oil and gas exploration and production. It is also developing a portfolio of assets in Colombia and Ecuador. As of December 31, 2020, GTE had total proved undeveloped reserves of 26.2 million barrels of oil equivalent in Colombia. GTE has a $297.79 million market capitalization.

During the third quarter, ended September 30, 2021, GTE’s net income came in at $35.01 million, versus a $107.82 million net loss in the prior-year quarter. The company’s oil sales increased 154.6% year-over-year to $135.32 million. Its EPS was $0.1, compared to a $0.29 loss per share in the third quarter of 2020. Also, the company’s adjusted EBITDA grew 273.8% from its year-ago value to $81.8 million.

GTE’s revenue is expected to increase 24.1% year-over-year to $545.5 million in its fiscal year 2022. Its EPS is expected to increase 42.9% next year. The stock has surged 66.6% in price over the past three months and 254.2% over the past year.

GTE’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has an A grade for Sentiment and Momentum.

In addition to the POWR Ratings grades I’ve just highlighted, one can see GTE’s ratings for Value, Growth, Quality, and Stability here. The stock is ranked #9 of 49 stocks in the A-rated Foreign Oil & Gas industry.

Civeo Corporation (CVEO)

CVEO is a global workforce accommodation specialist with a market capitalization of $295.69 million. The Houston, Tex.-based company provides a range of hospitality services, including lodging, catering and foodservice, housekeeping, and maintenance at accommodation facilities. It also offers development activities for workforce accommodation facilities. CVEO owns and operates 28 lodges and villages with approximately 30,000 rooms, and a fleet of mobile accommodation assets.

CVEO’s revenue increased 8.5% year-over-year to $155.06 million for the third quarter, ended September 30, 2021. The company’s operating income came in at $6.01 million. Its net income amounted to $1.02 million. Also, the company’s revenue under the Canada segment grew 17.1% from the year-ago value to $84.06 million.

Analysts expect CVEO’s revenue for its fiscal year 2021 to be $577.17 million, representing 9% growth year-over-year. Its EPS is expected to grow 215.8% next year. The stock has soared 24.9% in price over the past six months and 58.6% over the past year.

It is no surprise that CVEO has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. Also, the stock has a B grade for Value, Stability, and Quality.

Click here to see the additional POWR Ratings for CVEO (Momentum, Sentiment, and Growth). CVEO is ranked #6 of 46 stocks in the B-rated Outsourcing – Business Services industry.

PLPC shares were unchanged in premarket trading Friday. Year-to-date, PLPC has gained 0.56%, versus a 26.65% rise in the benchmark S&P 500 index during the same period.

Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research.

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