MENU

3 Cheap Small-Cap Stocks: Sirius Minerals PLC, Numis Corporation PLC And Clinigen Group PLC

Shares in corporate advisory firm Numis (LSE: NUM) have risen by as much as 3% following the release of an upbeat trading update today. Performance in the second half of the year was particularly strong and this means that its full-year sales are up 5%.

Notably, client activity picked up in the second half of the year, which enabled Numis to complete 15 equity raisings, including 5 IPOs. This brought the total equity raisings for the year to 38, with funds raised exceeding £2bn for the third year in succession.

Bright future

In addition, corporate activity within Numis’ client base resulted in a substantial increase in advisory fees, with combined revenues from equity issuance and advisory activity now being at record levels.

This, combined with continued investment in the company’s infrastructure and in its most valuable asset, its staff, means that Numis has a relatively bright future. And, with the company’s shares trading on a price to earnings (P/E) ratio of around 10, they appear to be cheap and well-worth buying.

Also trading at an appealing price level is fellow small-cap Clinigen (LSE: CLIN). In fact, the pharmaceutical services company may have a P/E ratio of over 22, but when its impressive growth prospects are taken into account, Clinigen appears to be a very enticing stock.

Future potential

For example, it is expected to grow its bottom line by 13% in the current year, which puts it on a price to earnings growth (PEG) ratio of only 1.3. This indicates that its shares offer growth at a very reasonable price and, furthermore, Clinigen’s track record of having increased earnings at an annualised rate of 27% during the last three years should provide its investors with confidence in the future potential of the business.

In addition, Clinigen may be well-protected from the ups and downs of the economic cycle, since the pharmaceutical sector is less highly correlated with the wider economy than most industries. As such, it appears to be a good value and reliable stock to own for the long term.

Positive results

Similarly, potash mining company Sirius Minerals (LSE: SXX) could also be described as offering good value for money. That’s because it has huge potential to develop a world-class potash mine in York, with planning permission having been granted.

And, with positive results from crop studies regarding the success of the company’s polyhalite fertiliser called POLY4, it is expected that demand for the product will be high due to its impressive relative performance versus potassium-based chloride fertiliser, which has traditionally been used across the globe.

Clearly, there is a long way to go before Sirius Minerals becomes a fully-fledged mining company and financing is still required to build the mine. But, despite being a risky investment, Sirius Minerals could be worth buying due to it having a world-class asset which may prove to be undervalued.

Of course, there are a number of other small-cap stocks that could be worth buying right now and, with that in mind, the analysts at The Motley Fool have written a free and without obligation guide called 1 Top Small-Cap Stock From The Motley Fool.

The company in question may have flown under your investment radar until now, but could help you to build a great income from your investments and retire early, pay off the mortgage, or simply enjoy a more abundant lifestyle.

Click here to find out all about it - it's completely free and comes without any obligation.

Peter Stephens owns shares of Clinigen and Numis. The Motley Fool UK has recommended Clinigen. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.