It costs much more to keep a vehicle running than just the up-front purchase price. This is why our pick for the best small-cap stock to buy today holds so much value.
Individual vehicles take on many additional costs such as insurance, maintenance, and gas. Fleet-management companies scale that up by the thousands, and they manage some of the most mission-critical, high-tech vehicles in the world.
The small-cap stock we like has a perfect score of 4.75 in our Money Morning Stock VQScore™ system, making it one of the must-buy small-cap stocks today.
FleetCarma projects the fleet management industry will double between 2017 and 2022 due to an evolving transportation landscape. GPS systems, remote-controlled and self-driving vehicles, and electronic logging devices will be catalysts for growing this company, a top federal services provider and defense contractor. With a market cap under $400 million, the share price certainly has room to skyrocket.
Wall Street doesn't know yet, but this pick could be worth 10 times its current share price in the future.
The sooner you jump in, the more likely this top small-cap stock will boost your portfolio.
The Best Small-Cap Stock to Buy Now
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VSE Corp. (NASDAQ: VSEC) is a Virginia-based fleet and supply chain management firm. It was founded in 1959 and currently has more than 2,306 full-time employees in eight countries.
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The company provides specialized technical services for fleets and transportation equipment, particularly large-sized ones such as aircraft and ships. It is a major defense contractor and federal services provider. VSE also delivers aviation services such as repair, maintenance, and overhaul.
While there are a number of supply chain and fleet management companies out there, VSE is a prime buy and a top small-cap stock for three reasons: 1) It's well-managed; 2) it's in high demand; 3) its price is down... for the moment.
VSE supplies mission-critical support and critical parts to the entire U.S. Postal Service fleet. It is also the go-to fleet manager and supplier for other government entities that use specialized and large vehicles for their missions.
VSE is one of the Navy's top 50 contractors. It currently holds two major contracts with the Navy, one with the Air Force, four with the Army, and two with the Department of Defense.
This isn't the only way VSE serves this nation's military, though.
Nearly a third of this company's staff have military backgrounds, and a quarter are disabled veterans. Recently, it was given the HIRE Vets Medallion Program Demonstration Award by the U.S. Department of Labor.
VSE owes some of its ongoing success to a long string of strategic acquisitions. In 2011, it acquired Wheeler Bros. Inc., a Pennsylvania-based company that was a major distributor of parts for the Department of Defense and the U.S. Postal Service.
In 2015, it acquired Prime Turbines, a Massachusetts-based aviation company. Since the acquisition, VSE Aviation has received the "Diamond Award" for excellence from the Federal Aviation Administration.
In early 2019, VSE announced its acquisition of Florida-based 1st Choice Aerospace at a price tag of $112 million. This is a large repair, overhaul, and maintenance company with 200 employees and a presence in major aviation hubs in Kentucky and Florida.
In short, this is a well-managed company providing several must-have services and products to government entities with strong budgets.
Right now, this small-cap stock pick is available at a significant discount.
How to Get Best Small-Cap Stock at a Discount
VSEC shares took a significant hit in 2018. Although the share price has rebounded since November, it is still down 35% over the past 12 months. Even with this drop, the company has kept its fundamentals.
For the nine months ending in September, net income was $25.8 million, an increase of 19% from the prior year.
Over the past three years, the company has grown its earnings per share by an average of 21% annually.
Even more astounding, the company's price-to-sales ratio is just 24% of the average for the industry.
VSE's price-to-book ratio is currently 1.27, which is close to 90% lower than the 10.69 industry average.
This means smart investors should grab VSE shares as quickly as possible because there is potential to multiply your investment tenfold.
And that's just the current fair value for the stock. When the next generation of vehicles makes its way into defense, aviation, and federal fleets, this company will monitor, maintain, and keep them supplied with parts.
Whether you are looking for a short-term payoff or a long-term investment, don't pass over this small-cap stock.
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