2 small-caps savvy value hunters shouldn’t ignore

Shares in Acal (LSE: ACL) moved further away from recent nine-month peaks on Thursday, the company dealing 1% lower despite the release of a perky trading statement.

The electronic goods manufacturer announced that it expects to report “double-digit growth in underlying operating profit” for the period spanning April-September. As well as enjoying a 10% sales uptick, an 18% rise in orders shows that Acal is dealing effectively with the challenging market conditions.

Indeed, Acal noted that “since the first quarter, orders have increased and are showing good levels of organic growth in line with our expectations of achieving stronger sales in the second half of the year.”

Although organic orders and sales are expected to have dropped 1% and 8% respectively during the first half, orders bounced 3% higher during July-September, including a 6% hike last month.

And other factors look set to benefit the bottom line looking ahead. The company’s international bias is allowing it to reap the fruits of sterling’s decline; ongoing restructuring is on course to deliver £4m in cost savings per annum, Acal announced; and the Guildford business tantalisingly advised of “a pipeline of opportunities that are progressing well” on the acquisition front.

These factors are expected to drive earnings 5% and 10% higher in the years to March 2017 and 2018 respectively, resulting in very-decent P/E ratios of 13.9 times and 12.6 times.

And dividends are expected to keep marching higher too, with predicted dividends of 8.4p per share for 2017 and 8.7p for the following year yielding a chunky 3.2% and 3.4%.

I reckon Acal’s strong profit outlook merits serious attention, particularly from value hunters.

Safe as houses

A bright outlook for the housing sector also makes MJ Gleeson (LSE: GLE) a great stock pick, particularly at current price levels.

The construction play is anticipated to record a 6% earnings rise in the year to June 2017 alone, creating a P/E rating of 12.9 times. This is comfortably below the watermark of 15 times that’s broadly considered attractive value.

And while a forward dividend yield of 2.7% may lag the blue-chip average of 3.5%, I believe the prospect of electric payout growth in the years ahead makes Gleeson a solid income pick. The housebuilder hiked the dividend from 10p in 2015 to 14.5p last year, and another sizeable hike — to 16p — is forecast for the current period.

Gleeson saw revenues leap 20.8% during the year to June 2016, to £142.1m, it advised late last month. This stunning result drove pre-tax profits (minus exceptional items) 20.5% higher from the prior year, to £28.2m.

And the company advised that “Gleeson Homes continues to see strong customer demand for its low cost homes,” a trend that I believe should continue as supportive lending conditions and Britain’s long-running housing shortage drives demand.

Despite patchy housing market data since June’s Brexit referendum, I reckon Gleeson remains on course to deliver stunning profit growth well into the future.

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Royston Wild 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.