4 Under the Radar Small-Cap Stocks to Buy in the Fourth Quarter

The futures of the S&P 500 and the Dow Jones Industrial Average edged higher this morning, after a dip on Wednesday over concerns of the tech sector’s underperformance in a rising interest-rate environment. Significant job growth…

last month a moderate drop in the unemployment rate, and Senate Majority Leader Chuck Schumer’s recent announcement that the chamber had reached a deal to avoid a government shutdown this week should give a boost to the stock market in the upcoming days. This, along with the expected continuation of the low-interest-rate environment, should benefit small-cap stocks.

Moreover, with a sustained rally in the stock market over the past few months, many large-cap stocks have become highly overvalued. Therefore, quality small-cap stocks that remain under the radar should offer better returns.

We think Tennant Company (TNC – Get Rating), Standex International Corporation (SXI – Get Rating), Donnelley Financial Solution Inc. (DFIN – Get Rating), and AdvanSix Inc. (ASIX – Get Rating) could be strong bets now, considering their expanding market reach and fundamental strength.

Tennant Company (TNC – Get Rating)

With a market capitalization of $1.39 billion, TNC is engaged in designing, manufacturing, and selling floor cleaning equipment worldwide. The company offers its products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IRIS, VLX, IPC, Gaomei, Rongen brands, and private-label brands.

TNC’s revenue increased 30.4% year-over-year to $279.1 million in the second quarter that ended June 30, 2021. Its operating income came in at $20.4 million. The company reported a net income of $9.8 million, while its EPS came in at $0.51 over this period.

The company’s EPS is expected to grow 49.5% year-over-year to $4.35 in fiscal 2021. Analysts expect TNC’s revenue to increase 10.2% year-over-year to $1.1 billion in the current year. The stock has gained 24.2% over the past year and 8.1% over the past nine months.

TNC’s POWR Ratings reflect this promising outlook. The company has an overall grade of A, which translates to a Strong Buy rating in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

TNC also has a B grade for Growth, Stability, and Value. Within the A-rated Industrial -Machinery industry, it is ranked #1 out of 83 stocks.

To see additional grades for Quality, Momentum, and Sentiment for TNC, click here.

Click here to check out our Industrial Sector Report for 2021

Standex International Corporation (SXI – Get Rating)

SXI, along with its subsidiaries, manufactures and distributes a variety of commercial and industrial products and services in the U.S. And overseas. The company operated through five segments: Electronics; Engraving; Scientific; Engineering Technologies; and Specialty Solutions. It has a market capitalization of $1.22 billion.

During the fourth quarter that ended June 30, 2021, SXI’s total revenue increased…

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