7 Very Attractive Small Cap Stocks By Valuation

With the market so volatile and the investors generally heading for the exits, many good companies can be acquired today for cheap. The following 7 stocks appear to be good buys right now with terrific valuations and solid history of earnings growth. In a few cases, the undervaluation is extreme due to temporary issues.

Each stock listed here has a P/E ratio under 10, a P/B ratio under 1 and has a positive earnings growth history in the previous 5 years. Whether the earnings will continue to grow or not, the stocks are priced reasonably attractively in the market. This list does not contain any Energy or commodities names, which have been the primary drivers of the stock market weakness in the recent months. More than half of these are banks or financial companies of some kind that have also seen declines recently.

These companies range from $30 million to $1 billion in market capitalization. Please note that additional detailed data is in the spreadsheet attached to this article.

Banks and Financial Institutions

Middlefield Banc Corp (MBCN)

This is a 100 year old bank serving Central Ohio. The stock pays a 3.26% dividend. The company only commands a valuation of about $63 million and is very thinly traded so liquidity can be an issue. However, the company has had consistent revenues and profits historically (16% 5 yr EPS growth) and since Dec 2012, it has grown its book value by 21% The stock can be bought at about 1x book value and a little less than 10x earnings. This is the most expensive stock in this list of 7.

Northrim BanCorp Inc (NRIM)

Northrim Bancorp sports similar multiples to Middlefield with stock being priced at 9x earnings and 0.93 times book value and 5 year EPS growth of 16% or so and delivers a 3.15% yield in dividends. The bank operates in Anchorage, Alaska and is about $170 million in market cap. I like this better than Middlefield as the stock is more liquid, a little less expensive and the balance sheet is a little stronger.

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