Top 15 Small-Cap Consumer Cyclical Stocks
Marvin's rules picked 15 small-cap Consumer Cyclical stocks, led by Monarch Casino & Resort and Standard Motor Products. They are ranked by Overall score, which compares each company with others in its own industry.
Consumer Cyclical companies sell things people tend to buy more of when budgets are comfortable and cut back on when money is tight. That includes cars and car parts, restaurants, furniture, clothing, retail and casinos. Small-cap means the company is relatively small by market size, so it is usually less widely followed than a household-name giant.
This list has 15 small-cap stocks from the sector, chosen by Marvin's rules. It covers a wide mix of businesses, from casinos and packaging to footwear and school buses. The blurbs below use last-fiscal-year figures such as revenue growth, margins, return on equity and debt where we have them.
Keep in mind that a high score is a snapshot, not a forecast. Some companies are missing certain figures, and small companies can swing more than large ones. Treat this list as a starting point for your own research.
The list
How Marvin ranked these stocks
Marvin included companies above a minimum size threshold and below a small-cap ceiling, from the Consumer Cyclical sector only. They are ranked by Overall score, highest first, with no more than 4 stocks per industry. Scores run from zero to one hundred and are relative to each company's own industry. A high score means a company looks strong compared with its industry peers, not compared with every company in the market.
Companies above about $300 million in size, ranked by Marvin scores (0-100, relative to each company's own industry). The Consumer Cyclical sector, highest Overall score first, among companies under about $2 billion in size; at most 4 per industry.
The stocks, one by one
Monarch Casino & Resort, Inc. MCRI
Monarch Casino & Resort has an Overall score of 95 and turns a large share of revenue into spare cash, with a free cash flow margin of 27.8%. Return on equity is 19.8%. Caution: revenue growth was only 4.4%, and operating margin and debt figures are missing.
Standard Motor Products, Inc. SMP
Standard Motor Products grew revenue 22.4% last fiscal year, a solid pace. Profitability is thinner, with an operating margin of 8.4% and return on equity of 7.1%. Caution: modest margins leave less cushion, and debt-to-equity of 0.97 is worth watching.
Karat Packaging Inc. KRT
Karat Packaging shows healthy profitability: a gross margin of 40.7%, an operating margin of 12.8% and return on equity of 30.2%. Revenue grew 10.7%. Caution: no debt-to-equity figure is available, so its borrowing level is unclear from this data.
Blue Bird Corporation BLBD
Blue Bird earns a high return on equity of 43.0% while carrying low debt, with debt-to-equity of 0.18. Its operating margin is 11.8%. Caution: gross margin of 20.6% is lower than many peers on this list, so costs take a bigger bite of sales.
Liquidity Services, Inc. LQDT
Liquidity Services grew revenue 31.2%, one of the faster rates here, and converts sales into cash well, with a free cash flow margin of 18.4%. Caution: operating margin is a more modest 9.0%, and no debt figure is available.
Weyco Group, Inc. WEYS
Weyco Group has a gross margin of 49.1% and a free cash flow margin of 16.2%, pointing to a profitable, cash-generating business. Caution: revenue shrank -4.9% last fiscal year, and no debt figure is available.
Flexsteel Industries, Inc. FLXS
Flexsteel Industries posted return on equity of 24.8% and an operating margin of 9.3%, with an Opportunity score of 95. Caution: revenue growth was just 4.1%, gross margin is 24.7%, and no debt figure is available.
Nathan's Famous, Inc. NATH
Nathan's Famous has a strong operating margin of 17.7% and a free cash flow margin of 11.3%, with revenue growth of 9.4%. Caution: return on equity and debt-to-equity are not available, so shareholder returns and borrowing are harder to judge.
XPEL, Inc. XPEL
XPEL grew revenue 13.3% and has a gross margin of 42.9%, with low debt (debt-to-equity of 0.21). Caution: its free cash flow margin was slightly negative at -0.6%, so it did not generate spare cash last fiscal year.
MillerKnoll, Inc. MLKN
MillerKnoll has a gross margin of 39.5%, but lower profitability further down, with an operating margin of 5.2% and return on equity of 7.2%. Caution: debt-to-equity of 1.34 is higher than most on this list, and its Quality score is 73.
Winmark Corporation WINA
Winmark Corporation stands out for very high profitability, with an operating margin of 59.7% and a free cash flow margin of 47.7%. Caution: its Opportunity score is only 60, and gross margin, return on equity and debt figures are missing.
Movado Group, Inc. MOV
Movado Group has a high gross margin of 56.1% and a free cash flow margin of 10.4%. Caution: revenue growth was only 2.7%, operating margin is 6.9%, and its Quality score of 63 is among the lower ones here.
Build-A-Bear Workshop, Inc. BBW
Build-A-Bear Workshop has a gross margin of 56.7% and return on equity of 32.4%, with revenue growth of 6.7%. Caution: free cash flow margin is a thin 4.7%, and operating margin and debt figures are not available.
Legacy Housing Corporation LEGH
Legacy Housing has a high operating margin of 32.8% and a free cash flow margin of 21.5%, so it is quite profitable. Caution: revenue fell -10.7% last fiscal year, and no debt figure is available.
Accel Entertainment, Inc. ACEL
Accel Entertainment grew revenue 8.1% and posted return on equity of 20.0%. Its operating margin is 8.2%. Caution: debt-to-equity of 2.02 means debt is a point to watch, and gross margin is not available.
Common questions
What does small-cap mean?
Small-cap refers to companies with a relatively small total market value. They often grow faster than giants but can be more volatile and less widely covered. This list uses a minimum size and a small-cap ceiling to define its group.
Why are scores relative to each company's industry?
Normal margins and debt levels differ a lot between businesses. A casino and a furniture maker, for example, are built very differently. Comparing each company with its own industry peers gives a fairer picture than comparing across the whole market.
Does a high Overall score mean I should buy the stock?
No. Marvin's scores describe how a company compares with industry peers today. They are not a forecast or advice. Prices, economic conditions and company-specific risks can change, so it helps to read further and consider your own situation.
Why are some figures missing for certain stocks?
Some companies do not report, or do not have, a figure in a form Marvin can use, such as operating margin or debt-to-equity. When a figure is missing, the blurb avoids it and notes the gap where it matters.
Keep reading
- Top 15 Consumer Cyclical Stocks by Marvin Opportunity Score
- Top 15 Consumer Cyclical Companies by Business Quality
- Top 16 Auto Stocks, Ranked by Marvin Scores
- Top 15 Consumer Cyclical Stocks With the Least Debt
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Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.