ATKR - 3 Small Cap Stocks with Explosive Growth Potential: MarineMax Meridian Bioscience and Atkore International Group

With the stock market’s sustained bullishness over the past year many popular large- and mid-cap stocks have become highly overvalued. Indeed, some analysts are worried now that the stock market may have entered a bubble similar to the dot-com bubble of the late 1990s.

In the current stock market environment, investing in small-cap stocks that have solid growth potential could be a smart decision. Although small-cap stocks typically carry higher risk profiles than their mid- or large-cap counterparts, the higher risk is often justified by solid growth attributes and the potential to deliver significantly higher returns.

Though large-cap growth stocks have attracted most investors’ attention over the past year, small-cap stocks have not been totally overlooked. This is evidenced by the  Vanguard Russell 2000 Index Fund ETF (VTWO), which can be viewed as an indicator of the overall performance of small cap stocks; it has  gained 35.3% over the past year.

Small-cap stocks Atkore International Group Inc. (ATKR), Meridian Bioscience, Inc. (VIVO), and MarineMax, Inc. (HZO) have delivered decent returns over the past year. We think they are now gearing up for a stellar run in 2021 thanks to their growth attributes. The revenue and earnings growth outlook for these stocks is impressive.

Atkore International Group Inc. (ATKR)

ATKR develops, manufactures, and markets a variety of products with  application in electrical raceways. The company offers wire baskets, cable trays, PVC and aluminum conduits, and more. ATKR’s stock has gained 50.1% over the past year to close the last trading session at $63.27.

ATKR recently launched the Atkore Revit Toolbar that  allows users to import building information models into their designs. It has also  announced that it will be acquiring Sign Support Systems from Skidril Industries LLC. The acquisition will complement ATKR’s existing product line-up.

The company’s  trailing-twelve-month revenue grew at a CAGR of 1.9% over the past five years. Its  trailing-twelve-month EBITDA grew at a CAGR of 20.1% over the past three years.

ATKR is expected to see revenue growth of 22.3% for the quarter ended March 31, 2021 and 19% in 2021. Its  EPS is estimated to grow 56.1% in 2021 and at a rate of 12.9% per annum over the next five years.

ATKR’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

ATKR  has an A  grade for Growth, Momentum, Sentiment, and Quality. In the 43-stock Industrial - Metals industry, it is ranked #1.

In total, we rate ATKR on eight different levels. Beyond what we stated above we have  also given ATKR grades for Stability and Value. Get all the ATKR ratings here.

Meridian Bioscience, Inc. (VIVO)

VIVO develops, manufactures, and markets a wide range of diagnostic test kits, purified reagents, and related products. The company also offers biopharmaceuticals-enabling technology. VIVO’s stock has gained 230.6% over the past year and its last closing price was $26.12.

VIVO recently expanded its production capacity for coronavirus diagnostic tests. The company has also recently launched an Air-Dryable RT-qPCR Mix, which will significantly simplify workflows for COVID-19 molecular test manufacturers.

The company’s trailing-12-month revenue grew at a CAGR of 9.3% over the past five years, while its  trailing-12-month EBITDA grew at a CAGR of 26.4% over the past three years.

VIVO’s revenue is estimated to increase 32.3% in 2021. The company’s EPS is expected to rise 66.4% in 2021 and at the rate of 17% per annum over the next five years.

The POWR Ratings are also high on VIVO. It has an Overall Rating of A, which translates to a Strong Buy. The stock also has an A grade for Growth and Quality. In the 60-stock Medical – Diagnostics/Research industry, it is ranked #6.

Click here to see the additional POWR Ratings for VIVO (Value, Stability, Momentum, and Sentiment).

MarineMax, Inc. (HZO)

HZO is a recreational boat and yacht retailer. The company  has operations primarily in the United States. HZO’s closed yesterday’s trading session at $44.46, gaining 121.1% over the past year.

HZO  recently acquired SkipperBud’s,  a boating company. The acquisition has significantly expanded HZO’s presence in the West Coast and Great Lakes areas with 20 new locations.

HZO’s trailing-12-month revenue has increased at a CAGR of 16.2% over the past five years, while its  trailing-12 -month EBITDA grew at a CAGR of 31.5% over the past three years.

HZO’s revenue is estimated to increase 42.4% for the quarter, ended March 31, 2021, and 25.2% in 2021. The company’s EPS is expected to rise 25.7% in 2021 and at the rate of 30% per annum over the next five years.

HZO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary ratings system. HZO has an A grade for Growth, along with Value and Quality ratings of B. Note that the Quality rating is focused on the fundamental metrics of its  operation. In the 33-stock Athletics & Recreation industry, it is ranked #3.

Beyond what we stated above we also have given HZO a grade for Sentiment, Stability, and Momentum. Get all the HZO ratings here.

The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

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ATKR shares were trading at $62.32 per share on Wednesday afternoon, down $0.95 (-1.50%). Year-to-date, ATKR has gained 51.59%, versus a 4.70% rise in the benchmark S&P 500 index during the same period.

About the Author: Aaryaman Aashind

Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.

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