Today’s Small-Cap Superstars? LSL Property Services plc, Matomy Media Group Ltd And Easyhotel PLC

Will these 3 small-caps soar in 2016 and beyond? LSL Property Services plc (LON: LSL), Matomy Media Group Ltd (LON: MTMY) and Easyhotel PLC (LON: EZH).

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Residential property services provider LSL (LSE: LSL) has today issued an upbeat trading update for the year ended 31 December 2015. In fact, with its performance in the second half of the year being particularly strong, the company now anticipates that underlying operating profit for the 2015 full year will be ahead of 2014’s level. In response, the company’s shares are up over 10% today.

Encouragingly, LSL’s estate agent division posted an increase in income of 5% in 2015, with exchange income up by 1%, lettings income rising by 12% and financial services income increasing by 16%. It continues to seek further acquisitions and its strategy of both expanding its number of branches and also maximising operating profit per branch seems to be paying off.

With LSL forecast to increase its bottom line by 16% in 2016, investor sentiment could remain strong over the medium term. And with the company having a price-to-earnings growth (PEG) ratio of just 0.5, it seems to offer growth at a reasonable price as well as a generous yield of 5.6%.

Digital delight

Also posting strong gains today is digital advertising company Matomy Media (LSE: MTMY), with its shares being up 8% following the release of a pleasing update. Encouragingly for its investors, the company will meet the guidance issued in August for the 2015 financial year, with earnings before interest, tax, depreciation and amortisation (EBITDA) expected to be between $25.3m and $25.7m, with strong growth in the second half of the year significantly outpacing that of the first half of the year.

Looking ahead, Matomy Media is confident in the outlook for the digital advertising sector. While the first half of 2015 was challenging, it believes that the rapid evolution of the industry and its diversified business model provide significant growth opportunities. And with earnings growth of 72% being pencilled-in by the market for 2016, investor sentiment in the stock could continue to improve following the 49% fall in Matomy Media’s share price in the last year. With a PEG ratio of 0.1, it appears to offer substantial capital gains, although it’s likely to be relatively volatile.

Easy does it

Meanwhile, shares in Easyhotel (LSE: EZH) are up by 10% today despite no significant news flow being released by the company. This follows a 45% rise in the last three months and shows that investor sentiment may be warming to the super-budget hotel chain.

Furthermore, with Easyhotel having released an encouraging trading update just last week that stated the company’s performance is on track, its long-term outlook remains relatively upbeat. For example, it has been granted planning permission for new developments in Manchester and Liverpool, with the company aiming to establish further hotels in gateway cities across the UK and Europe.

Although Easyhotel’s concept could work, its current valuation indicates that it may be a stock to watch rather than buy after its recent share price rise. For example, it trades on a price-to-earnings (P/E) ratio of 92 and even though its growth prospects may be bright, it may be prudent to await a keener valuation before buying.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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