+ 0.49
+ 0.32%

3 Small Caps Every Family Office Should Own

December 5, 2013 3:55 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
3 Small Caps Every Family Office Should Own

Family offices are entities established to invest for wealthy families.

While each family office has its own goals, a major goal for all is to produce future returns that beat the overall market. If that cannot be accomplished, there is no reason for a family office not to simply place its capital in an index fund.

But small cap stocks such as Quadrant 4 Systems (OTC QFOR), Labor SMART (OTC: LTNC) and Americas Petrogas (OTC: APEOF) are producing the returns that could have family offices topping the market indexes.

Quadrant 4 Systems is an information technology firm that is up dramatically over the last 52 weeks of market action. A Benzinga article last month detailed the appeal of this company. Americas Petrogas, an oil and natural gas entity, has done well in recent market action, and was focused on in a Benzinga story several weeks ago." Labor SMART was also covered in a recent Benzinga article.

A major factor for the appeal of these small caps is the increasing revenues for each.

Labor SMART just reported record revenues, again. Quadrant 4 Systems did the same. Both revenues and production are up for Americas Petrogas. These are not small caps trading on potential: Each is increasing revenues from operations.

The potential for each has been recognized by the analyst community.

Quadrant 4 Systems is now trading around $0.80 a share. A recent research report put the target price at $7.00 a share. The mean analyst target price for Americas Petrogas on Yahoo! Finance is $4.25, more than 300 percent higher from its present level of around $1.50 a share. A recent analyst report projects the target price for Labor SMART to be $0.80, up from around $0.32, at the present.

An ideal way to judge the long term potential of a small cap is to look at similar firms in the industry.

For Labor SMART, it is TrueBlue (NYSE: TBI), which also operates in the demand labor segment of the staffing industry. TrueBlue now goes for around $25 a share. In March 2009, it was around $6 a share.

Numerex Corp. (NASDAQ: NMRX) is a small cap doing business in the same sector as Quadrant 4 Systems. Its stock price is around $13.50. In March 2009, it was under $2 a share.

Another Canadian oil and natural gas exploration firm like Americas Petrogas is Bellatrix Corporation (NYSE: BXE). Now around $7.50 a share, Bellatrix Corporation was trading in the $2.50 range in early 2008. As with Americas Petrogas, Bellatrix is headquartered in Calgary, the oil capital of Canada.

There are precedents for each in the sectors to show the tremendous upside. All are doing well in operations, shown by the higher earnings. The increasing revenues for Americas Petrogas, Labor SMART, and Quadrant 4 Systems should lead to rising share prices in the future for the family offices and others owning the stock.

Related Articles

In Praise of Small Cap Oil

Big Oil Is Slipping, But Small Caps Are Surging

The Future is Bullish for Oil and Natural Gas Stocks

3 Ways To Profit From Consolidation In The Energy Sector