THREE SMALL CAP BUYS05.03.2014

Last week we delivered profit results on 16 Small Caps and in tomorrow's issue we will be covering a similar numbers. If you missed last week's, you should be interested in three of the companies whose results excelled and which we have Buy ratings on.

MaxiTrans (MXI)
Trucking parts manufacturing and servicing
This stock is looking very cheap if it can achieve a second half bounce – trading on a PE in the high single digits and on a dividend yield of 6 per cent. We are going back to the Buy tack because we believe that management is up to the task.

Servcorp (SRV)
Serviced offices
Despite the share price rise SRV still looks good value, primarily because the stock is being lifted by strong fundamentals. This is what happens in turnaround situations. It is trading on a PE of 13 times for fiscal 2015 and a on a dividend yield of 5 per cent.

Silver Chef (SIV)
Financial services – Leasing specialist
As we always say when confronted by Silver Chef’s astronomical growth – this is a capital hungry business. It will always need to raise equity capital to keep expanding its balance sheet (and its profits). Having said that, the shadow banking system is going gang busters and Silver Chef is in a prime position. It trades on a PE of 11.5 times and on dividend yield of 6.2 per cent. It should be able to churn out 20 per cent EPS growth this year and next without raising any more capital.

Don't miss out on tomorrow's bumper results rundown, where we give a detailed rundown in 16 companies.

You might like to quickly check you why Small Caps matter.

Best wishes

Richard Hemming

About the Author

Richard Hemming

Investment analyst and Editor of Under the Radar Report

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