Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
on our list of holdings by the small-cap exchange traded fund Power Shares S&P Smallcap Energy (PSCE: Nasdaq)
is Geospace Technologies.About 5% of
the fund is tied up in its shares.PSCE,
of course, is based on the energy components of the S&P Small-cap 600 Index.
in Texas, Geospace Technologies
Corp. (GEOS: Nasdaq) manufactures instruments to capture
and process seismic data as well as thermal imaging equipment.While the seismic data instruments are
popular with oil and gas exploration and development companies, players in the
printing, signage and textile industries use the thermal imaging equipment. Besides equipment for land-based applications, the company also manufactures cables and “umbilicals”
along with marine seismic products, deep ocean-bottom seismic acquisition
systems, and borehole-deployed seismic acquisition systems.
recently introduced a cable-less seismic data acquisition system, which offers
improved economics and productivity.For oil and gas developers such economies are
very appealing and can make a difference in getting the order or losing the business
to a competitor.Indeed, Geospace has some
competition.Sercel and INOVA
are two top players in the seismic data collection sector.
company earned $53.9 million in net income on $246.3 million in sales over the
last year.That is represents a profit
margin of 21.9%.Besides wild
profitability, Geospace has a pristine, debt-free balance sheet.The majority of its assets are tangible, not
that there is any concern about solvency.Over the past three years cash flows from operations have covered
required investments in facilities and equipment.
course financial performance is not the key to the S&P Small-cap 600 Index,
which is a market-value weighted index.Geospace
keeps its berth in the index with a market cap that is now near $977 million.The company has 12.9 million shares
outstanding, only 4% of which are owned by insiders.Short-interest in the stock has crept higher
in recent months, probably in response to the rise in the stock price to a
52-week high of $113.73 set in February 2013.
is valued at 11.4 times the consensus earnings estimate for the year 2013.A comparison to the 18.8 price/earnings ratio
for historic earnings, suggests there is a 65% upside potential in the stock
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies