Welcome to Episode #420 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With the S&P 500 and the Nasdaq hitting new all-time highs again this month, many stocks appear to be expensive. Valuations are stretched.
Are there ANY value stocks out there with good fundamentals which are also red-hot?
Screening for Cheap Momentum Stocks
Tracey turned to one of Zacks premium stock screens called: “Fast-Paced Momentum at a Bargain” to look for companies that still had some value but also were joining in on the rally.
How does the screen determine what a “bargain” is? It uses the price-to-sales ratio (P/S) and looks for it under 1.0. A P/S ratio under 1.0 usually indicates value as investors are getting $1 worth of sales for less than that $1.00.
For example, a P/S ratio of 0.7 means investors are paying $0.70 for every $1.00 of sales. That’s a deal.
This screen also looks for a Zacks Style score in Momentum of A or B. Those are the two highest Style scores.
Additionally, it also looks for double-digit price changes in the stock over 4 week and 12-week periods.
And finally, the screen uses the Zacks Rank to find companies with rising earnings estimates. It screens for stocks with a Zacks Rank of #1 (Strong Buy) or #2 (Buy). This includes over 800 stocks.
Running this screen, it returned just 17 top ranked stocks.
And while the screen didn’t explicitly look for small cap companies, this screen returned a bunch of them. Historically, small caps have outperformed the large caps.
3 Top Small Cap Bargain Stocks for Your Short List
1. Enerflex Ltd. (EFXT)
Enerflex is a small cap energy infrastructure company based in Calgary. It has a market cap of $1.5 billion.
In the second quarter, the energy infrastructure contract backlog remained strong at $1.5 billion.
Enerflex shares are up 27.9% year-to-date but the stock remains a bargain. It has a forward price-to-earnings (P/E) ratio of just 10.4. A P/E of 10 or under indicates a dirt-cheap stock. Enerflex also has a price-to-sales (P/S) ratio of just 0.7.
It’s a rare small cap company that also pays a dividend, yielding 0.9%.
Enerflex is a Zacks #1 Rank (Strong Buy) stock. This is the top Rank.
Should Enerflex be on your short list?
2. Enova International (ENVA)
Enova is an online financial services company that serves small businesses and consumers who are underserved by traditional banks. It has a market cap of $2.96 billion, which Tracey still considers to be a “small cap.”
In the third quarter of 2025, Enova’s revenue was up 16% to $803 million. Earnings are expected to jump 32.9% in 2025.
Shares of Enova are up 26.7% year-to-date. It’s a Zacks Rank #2 (Buy) stock.
Should investors be looking at online fintech companies like Enova in 2025?
3. Aveanna Healthcare Holdings Inc. (AVAH)
Aveanna Healthcare operates a diversified homecare business serving 80,000 patients in 38 states, including children, adults and the geriatric population. It has a market cap of $2 billion.
On Oct 21, 2025, Aveanna released preliminary third quarter results which projected revenue growth between 21% and 22.6%. It also announced a 10 million share secondary.
Shares of Aveanna Healthcare are up 117% year-to-date. But it still has a low P/S ratio of just 0.94.
Aveanna Healthcare is a Zacks Rank #1 (Strong Buy).
Should a homecare provider like Aveanna be on your short list?
— Tracey Ryniec
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Source: Zacks
