10 Best Micro Cap 50m for February 2026
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Market Overview & Selection Criteria
In the current market environment, micro-cap stocks around $300M market cap present unique opportunities for value investors seeking undervalued companies with strong intrinsic value potential. Value Sense's automated fundamental analysis platform screens thousands of stocks using machine learning-driven metrics like Quality Rating, Intrinsic Value, ROIC, FCF margins, and revenue growth to identify candidates trading below their estimated worth. These 10 picks were selected from our micro-cap watchlist (under $50M+ filters adapted for this ~$300M cluster) based on a blend of high intrinsic value upside, solid quality scores above 4.7, and diverse sector exposure including financials, media, biotech, industrials, healthcare staffing, biotech/pharma, consumer discretionary, banking, construction, and regional banking. This methodology prioritizes companies with favorable gross margins, manageable debt levels, and growth catalysts, providing educational insights into potential value plays without constituting advice.
Featured Stock Analysis
Stock #1: FS Bancorp, Inc. (FSBW)
| Metric | Value |
|---|---|
| Market Cap | $308.2M |
| Quality Rating | 6.0 |
| Intrinsic Value | $76.7 |
| 1Y Return | 6.8% |
| Revenue | $217.5M |
| Free Cash Flow | $55.3M |
| Revenue Growth | 6.8% |
| FCF margin | 25.4% |
| Gross margin | 66.5% |
| ROIC | 49.1% |
| Total Debt to Equity | 45.9% |
Investment Thesis
FS Bancorp, Inc. (FSBW), a financial services provider with a $308.2M market cap, stands out in Value Sense analysis with a Quality Rating of 6.0 and an Intrinsic Value of $76.7, suggesting significant undervaluation for value-focused investors. The company demonstrates robust efficiency through a stellar ROIC of 49.1%, supported by $217.5M in revenue, $55.3M free cash flow, and a healthy FCF margin of 25.4%. Steady revenue growth of 6.8% aligns with a gross margin of 66.5%, while a moderate Total Debt to Equity of 45.9% indicates balanced leverage. Over the past year, FSBW delivered a 6.8% return, positioning it as a stable micro-cap banking play with strong cash generation for long-term analysis.
Key Catalysts
- Exceptional ROIC at 49.1% signals efficient capital allocation in banking operations.
- High FCF margin of 25.4% and $55.3M free cash flow provide flexibility for growth or dividends.
- Consistent 6.8% revenue growth and 66.5% gross margin reflect operational strength.
Risk Factors
- Moderate debt levels at 45.9% Total Debt to Equity could pressure in rising rate environments.
- Limited 6.8% 1Y return may indicate slower market recognition of intrinsic value.
Stock #2: The E.W. Scripps Company (SSP)
| Metric | Value |
|---|---|
| Market Cap | $303.3M |
| Quality Rating | 6.0 |
| Intrinsic Value | $15.1 |
| 1Y Return | 69.2% |
| Revenue | $2,318.7M |
| Free Cash Flow | $146.9M |
| Revenue Growth | (3.3%) |
| FCF margin | 6.3% |
| Gross margin | 44.4% |
| ROIC | 7.1% |
| Total Debt to Equity | 7.8% |
Investment Thesis
The E.W. Scripps Company (SSP), in the media sector with a $303.3M market cap, earns a Quality Rating of 6.0 and Intrinsic Value of $15.1 per Value Sense metrics, highlighting undervaluation potential. Despite a slight revenue dip of 3.3%, it generates impressive $2,318.7M revenue and $146.9M free cash flow with a 6.3% FCF margin. A ROIC of 7.1% and low Total Debt to Equity of 7.8% underscore financial health, complemented by a 44.4% gross margin. The standout 69.2% 1Y return demonstrates momentum, making SSP an intriguing media stock for diversified watchlists.
Key Catalysts
- Strong 69.2% 1Y Return reflects market traction amid media shifts.
- Substantial $146.9M Free Cash Flow supports reinvestment despite revenue contraction.
- Low 7.8% Total Debt to Equity offers resilience.
Risk Factors
- Negative 3.3% revenue growth signals potential advertising market challenges.
- Dependency on media cycles could impact future FCF margins.
Stock #3: XOMA Corporation (XOMA)
| Metric | Value |
|---|---|
| Market Cap | $302.9M |
| Quality Rating | 6.6 |
| Intrinsic Value | $20.2 |
| 1Y Return | -2.3% |
| Revenue | $40.7M |
| Free Cash Flow | ($708.0K) |
| Revenue Growth | 88.5% |
| FCF margin | (1.7%) |
| Gross margin | 94.9% |
| ROIC | 13.6% |
| Total Debt to Equity | 122.2% |
Investment Thesis
XOMA Corporation (XOMA), a biotech firm with $302.9M market cap, scores a high Quality Rating of 6.6 and Intrinsic Value of $20.2, indicating strong value appeal. Explosive 88.5% revenue growth to $40.7M pairs with a 94.9% gross margin and 13.6% ROIC, though free cash flow is negative at $708.0K with 1.7% margin. Elevated Total Debt to Equity at 122.2% reflects biotech leverage, offset by a -2.3% 1Y return that may undervalue pipeline potential in healthcare screening.
Key Catalysts
- Massive 88.5% revenue growth points to commercial momentum.
- Near-perfect 94.9% gross margin highlights biotech efficiency.
- 6.6 Quality Rating tops the list for fundamental strength.
Risk Factors
- Negative Free Cash Flow $708.0K and 1.7% margin signal cash burn.
- High 122.2% Total Debt to Equity increases funding risks.
Stock #4: Park-Ohio Holdings Corp. (PKOH)
| Metric | Value |
|---|---|
| Market Cap | $302.4M |
| Quality Rating | 4.9 |
| Intrinsic Value | $140.6 |
| 1Y Return | -10.7% |
| Revenue | $1,592.5M |
| Free Cash Flow | ($16.4M) |
| Revenue Growth | (3.9%) |
| FCF margin | (1.0%) |
| Gross margin | 4.1% |
| ROIC | 7.1% |
| Total Debt to Equity | 97.8% |
Investment Thesis
Park-Ohio Holdings Corp. (PKOH), an industrial player at $302.4M market cap, shows a Quality Rating of 4.9 and compelling Intrinsic Value of $140.6, suggesting deep undervaluation. With $1,592.5M revenue, it faces headwinds like 3.9% growth and negative $16.4M free cash flow (1.0% margin), but maintains 7.1% ROIC and 97.8% Total Debt to Equity. Low 4.1% gross margin reflects sector pressures, while -10.7% 1Y return offers entry for turnaround analysis.
Key Catalysts
- High Intrinsic Value $140.6 implies substantial upside potential.
- Solid 7.1% ROIC despite challenges shows capital efficiency.
- Large $1,592.5M revenue base for scale.
Risk Factors
- Negative revenue growth 3.9% and FCF $16.4M.
- Elevated 97.8% Total Debt to Equity and low 4.1% gross margin.
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Stock #5: Cross Country Healthcare, Inc. (CCRN)
| Metric | Value |
|---|---|
| Market Cap | $297.8M |
| Quality Rating | 4.9 |
| Intrinsic Value | $51.8 |
| 1Y Return | -48.9% |
| Revenue | $1,127.5M |
| Free Cash Flow | $48.2M |
| Revenue Growth | (22.1%) |
| FCF margin | 4.3% |
| Gross margin | 20.2% |
| ROIC | (4.6%) |
| Total Debt to Equity | 0.5% |
Investment Thesis
Cross Country Healthcare, Inc. (CCRN) in healthcare staffing, with $297.8M market cap, has a 4.9 Quality Rating and $51.8 Intrinsic Value. Positive $48.2M free cash flow (4.3% margin) contrasts 22.1% revenue growth drop from $1,127.5M, with 20.2% gross margin and negative 4.6% ROIC. Minimal 0.5% Total Debt to Equity is a strength, despite -48.9% 1Y return signaling sector volatility.
Key Catalysts
- Positive $48.2M Free Cash Flow and 4.3% margin for stability.
- Very low 0.5% Total Debt to Equity reduces risk.
- $1,127.5M revenue scale in healthcare.
Risk Factors
- Sharp 22.1% revenue growth decline and negative ROIC -4.6%.
- -48.9% 1Y return highlights staffing market pressures.
Stock #6: Genfit S.A. (GNFT)
| Metric | Value |
|---|---|
| Market Cap | $297.2M |
| Quality Rating | 5.4 |
| Intrinsic Value | $13.6 |
| 1Y Return | 63.1% |
| Revenue | €121.7M |
| Free Cash Flow | (€47.2M) |
| Revenue Growth | 373.6% |
| FCF margin | (38.7%) |
| Gross margin | 92.7% |
| ROIC | (22.4%) |
| Total Debt to Equity | 264.7% |
Investment Thesis
Genfit S.A. (GNFT), a biotech with $297.2M market cap, rates 5.4 in Quality and $13.6 Intrinsic Value. Exceptional 373.6% revenue growth to €121.7M boasts 92.7% gross margin, but €47.2M free cash flow (-38.7% margin) and negative 22.4% ROIC reflect R&D intensity. High 264.7% Total Debt to Equity is offset by 63.1% 1Y return.
Key Catalysts
- Explosive 373.6% revenue growth drives biotech excitement.
- Strong 92.7% gross margin and 63.1% 1Y return.
- Pipeline potential in pharma space.
Risk Factors
- Heavy cash burn with €47.2M FCF and -38.7% margin.
- Extreme 264.7% Total Debt to Equity.
Stock #7: El Pollo Loco Holdings, Inc. (LOCO)
| Metric | Value |
|---|---|
| Market Cap | $296.1M |
| Quality Rating | 4.7 |
| Intrinsic Value | $20.8 |
| 1Y Return | -15.0% |
| Revenue | $480.8M |
| Free Cash Flow | $2,478.0K |
| Revenue Growth | 2.1% |
| FCF margin | 0.5% |
| Gross margin | 22.6% |
| ROIC | 7.7% |
| Total Debt to Equity | 67.6% |
Investment Thesis
El Pollo Loco Holdings, Inc. (LOCO), consumer discretionary at $296.1M market cap, scores 4.7 Quality Rating with $20.8 Intrinsic Value. Modest 2.1% revenue growth to $480.8M yields $2,478.0K free cash flow (0.5% margin), 22.6% gross margin, 7.7% ROIC, and 67.6% Total Debt to Equity. -15.0% 1Y return suggests recovery potential.
Key Catalysts
- Positive ROIC 7.7% in restaurant operations.
- Steady 2.1% revenue growth and scale at $480.8M.
- Thin but positive FCF generation.
Risk Factors
- Low 0.5% FCF margin limits flexibility.
- 67.6% Total Debt to Equity in competitive dining.
Stock #8: CoastalSouth Bancshares, Inc. (COSO)
| Metric | Value |
|---|---|
| Market Cap | $294.2M |
| Quality Rating | 5.7 |
| Intrinsic Value | $24.4 |
| 1Y Return | 12.2% |
| Revenue | $135.6M |
| Free Cash Flow | ($22.2M) |
| Revenue Growth | 20.6% |
| FCF margin | (16.4%) |
| Gross margin | 42.5% |
| ROIC | 117.2% |
| Total Debt to Equity | 11.6% |
Investment Thesis
CoastalSouth Bancshares, Inc. (COSO), banking with $294.2M market cap, achieves 5.7 Quality Rating and $24.4 Intrinsic Value. 20.6% revenue growth to $135.6M features 117.2% ROIC and 42.5% gross margin, though $22.2M free cash flow (-16.4% margin) and low 11.6% Total Debt to Equity. 12.2% 1Y return adds appeal.
Key Catalysts
- Outstanding 117.2% ROIC for banking efficiency.
- 20.6% revenue growth momentum.
- Conservative 11.6% Total Debt to Equity.
Risk Factors
- Negative $22.2M Free Cash Flow and -16.4% margin.
- Regional banking exposure.
Stock #9: Concrete Pumping Holdings, Inc. (BBCP)
| Metric | Value |
|---|---|
| Market Cap | $293.5M |
| Quality Rating | 5.7 |
| Intrinsic Value | $19.1 |
| 1Y Return | -29.8% |
| Revenue | $392.9M |
| Free Cash Flow | $17.5M |
| Revenue Growth | (7.7%) |
| FCF margin | 4.5% |
| Gross margin | 38.5% |
| ROIC | 4.7% |
| Total Debt to Equity | 152.3% |
Investment Thesis
Concrete Pumping Holdings, Inc. (BBCP), industrials at $293.5M market cap, rates 5.7 Quality with $19.1 Intrinsic Value. $392.9M revenue shows 7.7% growth, positive $17.5M free cash flow (4.5% margin), 38.5% gross margin, 4.7% ROIC, but high 152.3% Total Debt to Equity. -29.8% 1Y return flags caution.
Key Catalysts
- Positive $17.5M FCF and 4.5% margin.
- Healthy 38.5% gross margin in construction.
- 5.7 Quality Rating supports recovery.
Risk Factors
- 7.7% revenue growth and -29.8% 1Y return.
- High 152.3% Total Debt to Equity.
Stock #10: Citizens Financial Services, Inc. (CZFS)
| Metric | Value |
|---|---|
| Market Cap | $292.3M |
| Quality Rating | 4.9 |
| Intrinsic Value | $92.1 |
| 1Y Return | 5.4% |
| Revenue | $170.1M |
| Free Cash Flow | $19.8M |
| Revenue Growth | 0.9% |
| FCF margin | 11.6% |
| Gross margin | 47.5% |
| ROIC | 19.9% |
| Total Debt to Equity | 0.0% |
Investment Thesis
Citizens Financial Services, Inc. (CZFS), regional banking with $292.3M market cap, has 4.9 Quality Rating and $92.1 Intrinsic Value. $170.1M revenue grows 0.9%, with $19.8M free cash flow (11.6% margin), 47.5% gross margin, 19.9% ROIC, and zero Total Debt to Equity. 5.4% 1Y return emphasizes stability.
Key Catalysts
- Zero Total Debt to Equity for pristine balance sheet.
- Strong 19.9% ROIC and 11.6% FCF margin.
- Reliable banking fundamentals.
Risk Factors
- Modest 0.9% revenue growth.
- 5.4% 1Y return trails peers.
Portfolio Diversification Insights
These 10 micro-cap stocks offer broad diversification across financials (FSBW, COSO, CZFS), media (SSP), biotech/healthcare (XOMA, GNFT, CCRN), industrials (PKOH, BBCP), and consumer (LOCO). Banking names provide stability with high ROIC (e.g., COSO's 117.2%), while biotech like GNFT adds growth (373.6% revenue surge). Balance high-debt plays (GNFT 264.7%) with low/no-debt (CZFS 0.0%, CCRN 0.5%). Allocate 20-30% to financials for cash flow, 20% biotech for upside, and rest to industrials/consumer for cyclical exposure, reducing sector-specific risks in a micro-cap portfolio.
Market Timing & Entry Strategies
Consider entry on dips below Intrinsic Value thresholds (e.g., FSBW under $76.7), monitoring macroeconomic factors like interest rates impacting banks (COSO, CZFS). For growth names like GNFT, watch revenue catalysts; for cash-generators (SSP, FSBW), dollar-cost average. Use Value Sense screeners for backtested timing, entering post-earnings if sentiment aligns with quality scores above 5.5. Scale positions gradually, targeting 5-10% portfolio weight per stock.
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FAQ Section
How were these stocks selected?
These stocks were curated from Value Sense's micro-cap watchlist using Quality Ratings 4.7+, high Intrinsic Value upside, ROIC, FCF metrics, and sector diversity for comprehensive educational analysis.
What's the best stock from this list?
XOMA leads with a 6.6 Quality Rating, 88.5% revenue growth, and 94.9% gross margin, though "best" depends on risk tolerance—compare via FSBW's top ROIC or SSP's 69.2% return.
Should I buy all these stocks or diversify?
Diversification across sectors like financials and biotech mitigates risks; analyze portfolio fit using Value Sense tools rather than concentrating in one area.
What are the biggest risks with these picks?
Key concerns include negative FCF (e.g., GNFT, PKOH), high debt (XOMA 122.2%, BBCP 152.3%), and revenue declines (CCRN -22.1%), common in micro-caps.
When is the best time to invest in these stocks?
Monitor for prices below Intrinsic Value, positive earnings catalysts, or macro improvements; use backtesting on Value Sense for historical entry patterns.