3 Top Micro-Cap Stocks to Weather Any Market

Micro-Cap StocksIn any market, there are companies outperforming the herd. Below, we’ll take a look at three examples of top micro-cap stocks that are highly likely to grow their businesses at a rate much faster than the general economy.

Because the stock market has already gone up in expectation of better business conditions, we’re getting sideways trading action. The market’s still in consolidation on lackluster earnings after two solid years of capital gains.

The stock market could easily be well into correction territory with the kind of earnings we’re getting these days. But extremely low interest rates still makes for an environment conducive to equities.

Without current monetary policy, I believe this market would be a lot lower.

Also Read: Top 5 Micro-Cap Stocks to Watch in 2015

Top Micro-Cap Stocks to Watch for this Market: Food, Healthcare, and Oil

No matter what the market condition or investor sentiment is, there’s typically a chain restaurant somewhere that’s growing its business with a proven concept that consumers like.

The right restaurant business can be an excellent moneymaker for a time, so long as management doesn’t over expand and they give the marketplace what it wants as opposed to what they think it wants.

Zoe’s Kitchen, Inc. (NYSE/ZOES)

Zoe’s Kitchen, Inc. (NYSE/ZOES) is one of my favorites in the category. It’s still small and at an early stage of development. But management is expanding carefully and deliberately with corporate-owned locations, which allows for full control over the supply chain, customer service, and quality control.

This stock is expensive, but I believe will remain this way as the company continues to generate double-digit growth in an environment where that’s very difficult to achieve.

Synergy Resources Corporation (NYSE/SYRG)

You wouldn’t think that the domestic energy business offers up good opportunity these days, but in any market, there are always diamonds in the rough. Despite cuts to drilling capital budgets, the domestic energy scene is still producing growth.

Synergy Resources Corporation (NYSE/SYRG) is one of these growth companies operating in the Denver-Julesburg Basin within Colorado, Wyoming, Kansas, and Nebraska.

This firm has a good track record of delivering production and financial growth to stockholders. The last few periods, the company’s financials have been pretty flat due to oil prices. But management still has strong forecasts for the future and I feel this is a junior energy company that’s just ripe for merger or acquisition activity.

Turning to healthcare, most equity market portfolios are well served having exposure to this sector.

Globus Medical, Inc. (NYSE/GMED)

Globus Medical, Inc. (NYSE/GMED) is a medical device company out of Audubon, PA. The company’s implants help treat patients with spine disorders. Management has been making small acquisitions over the last several years. While the business isn’t the fastest growing in the healthcare field, it’s been relatively consistent over the last number of years.

With a critical mass now achieved in the business, Globus Medical is another potential merger/acquisition target by a larger player.

So the broader market hasn’t much tailwind behind it. This makes individual stock selection, both among investment-grade securities and risk-capital micro-caps, all the more important. (See “Stock Market Investing When Everything’s Already Gone Up.”)

One thing this market continues to do is chase double-digit growth. Valuations should remain lofty among these stocks for the very reason that there’s so little comparable growth being produced these days.