Five Potential Small-Cap Value Plays

Due to the fact that small-cap stocks are of less interest to large institutional investors and tend to have a scant following among research analysts, it could be argued that the small-cap market is less efficient than more widely followed stocks. For this reason, it is a good place for active investors to search for bargains and undervalued names. A quick scan of stocks with market caps between $50 million and $300 million using a couple of traditional value metrics turned up ten names. Specifically, the scan looked for small-caps that are yielding over 5%, trading at a trailing P/E of 15 or less, and had a majority of "Strong Buy" ratings. Below, Benzinga highlights five of the stocks that met these metrics.

- This stock has shown up before in scans of potentially undervalued small-caps. Crown Crafts sells infant bedding, bibs, instant soft goods and accessories to retailers. The name has been soaring in 2012 and continues to look compelling. Year-to-date, CRWS has jumped almost 66%, including a better than 3% gain on Thursday. At current levels, CRWS has a market-cap of around $53 million. Furthermore, the stock is yielding around 6% at current levels. The chart pattern is also very interesting. CRWS has formed a high consolidation pattern and has been basing since the beginning of April. If this name were to begin breaking out to the upside from this basing area, it could run to considerably higher prices in short order.

- This tiny basic materials stock trades very little volume and has a market cap of only $68 million. The Humble, Texas-based company is engaged in steel processing, pipe manufacturing and processing, and steel and pipe distribution. Shares appear cheap, trading at a trailing P/E of 8.40 and a forward P/E of under 6. The stock looks like it has been effected by deteriorating economic sentiment, and has come off of its highs from earlier in the year. Year-to-date, FRD is down a little less than 4%. This is the kind of name that could certainly benefit from a boost of cyclical optimism. At current levels, FRD is yielding more than 5%, an attractive reward for holding the name.

- This company operates a diversified fleet of United States and international flag vessels that provide international and domestic maritime transportation services to commercial and governmental customers. The stock has been chugging along over the years, and on the 10-year chart, ISH is up 183%. Over the last year, however, shares are down more than 8%. Year-to-date, however, the stock has gained better than 2%. At current levels, ISH trades at a trailing P/E of 8.86 and yields more than 5%.

- This name started the year with a massive rally, but has since come off of its highs. The year-to-date high in the name is $17.50 which compares to its current price of $12.57. Wayside Technology Group, Inc. is an information technology (IT) channel company. The Company resells software and hardware developed by others, and provides technical services directly to its customers. The company has a market cap of roughly $59 million and yields over 5%. Valuation looks reasonable on an earnings basis, with the stock trading at a trailing P/E of 10.13 and a forward P/E of 9.24.

- This is an interestingly structured company. Tortoise is structured as a closed-end investment company and invests at least 80% of its total assets in equity securities of companies in the energy sector with their primary operations in North America, including energy infrastructure, oil and gas exploitation and energy shipping companies. Essentially, this is a small-cap vehicle to gain exposure to the energy sector, including MLPs. The advantage of this security is its dividend yield, which is over 6%. The stock has been hit in recent months as the energy sector has fallen along with crude oil. Nevertheless, TYN is still up a little less than 1% in 2012.