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The Zacks Analyst Blog Highlights: Delta Apparel, American Public Education, United Insurance Holdings and Piper Jaffray

For Immediate Release

Chicago, IL – April 08, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Delta Apparel Inc. (DLA), American Public Education, Inc. (APEI), United Insurance Holdings Corp. (UIHC) and Piper Jaffray Companies (PJC).

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Here are highlights from Thursday’s Analyst Blog:

4 Low P/E Value Caps Perfect for Value investors

We are in the midst of a global market sell-off amid concerns regarding the health of the world economy and falling oil prices that triggered massive selling in traditionally riskier assets. Economic malaise in Europe and the rest of the world and apprehensions of lackluster first-quarter earnings are currently some of the biggest headwinds for the stock market. The IMF recently said that emerging markets, led by China, are increasingly posing a risk to stock markets in the developed countries.

This current panic can, however, open up opportunities for patient yet alert investors. At this juncture, we believe value investment can be rewarding for investors who are averse to risk. Investors will be able to add dirt cheap stocks that are otherwise fundamentally strong and hold the promise of high returns.

Why Small-Caps?

Despite their inherent risks, stocks with a market cap of around $1 billion or below, or small-cap stocks, tend to outperform their large-cap counterparts over the long term. Moreover, value stocks tend to outperform their growth-oriented counterparts over the long haul.

Growth stocks tend to have higher valuations fueled by a positive outlook for future growth. This might make it difficult for such stocks to grow as much their undervalued counterparts. Small-cap value stocks could thus be a safer bet as these stocks generally yield high returns and generate exponential gains over time.

How to Make a Choice?

With the help of our new style score system, we have identified four small-cap stocks that have excellent prospects and would be worthwhile picks for value investors.

Our Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential.

To arrive at the best value picks, we short-listed stocks that combine a Zacks Rank #1 with a Value Style Score of ‘A.’ Then we selected those with a P/E of less than 15 and zeroed in on four stocks that have a market cap of under $1 billion.

Grab These 4 Small-Cap Value Stocks

Delta Apparel Inc. (DLA)
Greenville, SC-based Delta Apparel is an international design, marketing, manufacturing, and sourcing company that features a diverse portfolio of lifestyle basic and branded activewear apparel and headwear. It has a market capitalization of $150.31 million.

Transformation of its activewear business with new garments and fabrications that will meet current fashion trends, introduction of additional products and colors for spring delivery, investments in new equipment and continuing cost controls in both manufacturing and administrative functions should boost its growth profile.

The company possesses a P/E of 12.93. Compared to the industry at large, this is pretty cheap as the overall space has an average P/E of 21.1. Further, over the last four quarters, Delta Apparel has delivered an average positive earnings surprise of 36.36%.

Over the past 60 days, estimates for the current quarter have moved north 371% and 50% for fiscal 2016. For the current quarter, the company’s EPS is estimated to grow at a whopping 294.12% and for fiscal 2016 it is projected to skyrocket 294.74%

American Public Education, Inc. (APEI)

American Public Education provides online and campus-based postsecondary education with a market capitalization of $325.19 million.

The company continues to make enhancements with its targeted marketing, admissions processes, retention initiatives, and mobile technology. APUS Mobile, its classroom app, is now installed on over 44,000 devices with usage averaging 1.2 million page views per week. This is expected to be a growth driver.

Currently, American Public Education is trading at a forward P/E of 11.92, while the overall space has an average P/E of 19.1.

The company has expected earnings growth of 5%. Over the last four quarters, American Public Education has delivered an average positive earnings surprise of 11.05%. Estimates have moved up 10% for the current quarter and 9% for fiscal 2016 over the past 60 days.

United Insurance Holdings Corp. (UIHC)

United Insurance Holdings operates as a property and casualty insurance holding company that sources, writes, and services residential and commercial property and casualty insurance policies in the United States. Based in St. Petersburg, FL, it has a market capitalization of $391.4 million.

Management continues to diligently monitor and control operating expenses in the short term while also recognizing the importance of making prudent investments in infrastructure and people required to sustain growth and improve operating efficiency over the long term

United Insurance Holdings possesses a P/E of 10.55. Compared to the industry, this is pretty cheap as the overall space has an average P/E of 15.9. Over the last four quarters, United Insurance Holdings has delivered an average positive earnings surprise of 10.21%. Estimates have moved up 2% for the current quarter and 6% for fiscal 2016 over the past 60 days.

The company has impressive earnings growth of 20%. For the current quarter, the company’s EPS is pegged at 41 cents, a massive improvement from 1 cent earned in the year-ago quarter. For fiscal 2016 earnings is projected to grow 26%.

Piper Jaffray Companies (PJC)

Piper Jaffray soperates as an investment bank and asset management firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. It has a market cap of $740.97 million.

Piper Jaffray continues to invest in its business to position the company for continued growth and improved shareholder returns. Its expansion into Financial Institutions and Energy sectors represents a significant milestone for the firm.

Piper Jaffray possesses a P/E of 10.12, lower than the industry average of 11.8. Piper Jaffray has delivered an average positive earnings surprise of 20.70% over the past 4 quarters. For 2016 earnings are projected to grow 7.8%.

Bottom Line

For investors keen on good value investments, we advise them to look beyond stocks in the limelight, and invest instead in these hidden gems. At throwaway prices and backed by Zacks' style score system and upward estimate revisions, these stocks hold significant value proposition.

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DELTA APPAREL (DLA): Free Stock Analysis Report
 
AMER PUB EDUCAT (APEI): Free Stock Analysis Report
 
UTD INSURANCE (UIHC): Free Stock Analysis Report
 
PIPER JAFFRAY (PJC): Free Stock Analysis Report
 
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