Companies at the smaller end of the register are often overlooked, but there can be some real gems there if you know where to look.
The reasons these companies are overlooked are manifold, but often it's a combination of them being too small, their shares being too illiquid for bigger buyers, and sometimes they just don't get out there and promote themselves all that well.
Despite this, there are some companies in the smaller ranges which deliver solid earnings and dividends, and which could fit nicely in a portfolio.
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Profit upgrade boost shares
One which came across my radar just this week was CTI Logistics Ltd (ASX: CLX), which today has piled on an impressive 12.1% in share price gains to be trading at $2.13.
The increase, on low volume of 54,000 shares, followed the company updating its profit guidance for the year.
I'll excuse anyone who missed it as the press release went out past 5pm on a Monday, but the very brief missive made for good reading for investors.
The company, in a two paragraph statement, said pre-tax profit for the first half was expected to be up about 55% on the previous corresponding period.
The company went on to say:
The result has been driven in part by strong revenue growth in October and November with revenue for the half year expected to be up by 7% on the previous corresponding period. CTI's transport and logistics operations have benefited from increased demand across freight services as well as project work in Western Australia, coupled with increased efficiency and improved utilisation of our fleet.
Even after the company's share price jump to a 12-month high of $2.20 on Tuesday, based on historical dividend payouts, the company is delivering a healthy 5.3% yield, fully franked.
Another steady performer in the logistics sector is K&S Corporation Ltd (ASX: KSC), which is paying a 4.7% fully franked dividend.
K&S actually advised last month that its profits would fall in the first half, with underlying profit before tax expected to be between $15.3 million and $16.3 million, compared with the same period last year when profit came in at $23.4 million.
Leverage to data centres a bonus
The final company, and one which I own myself, is galvaniser and EzyStrut manufacturer, Korvest Ltd (ASX: KOV), which is currently trading on a 5.34% fully franked dividend yield.
Korvest shares are currently changing hands for $13.90, but broker Euroz Hartleys in October put a price target of $14.60 on the stock, saying the company's expansion plans and leverage to data centre builds put it in good stead.
Euroz Hartleys initiated coverage on Korvest in October with a buy recommendation, with the following reasons put forward to have confidence in the Adelaide-based company.
We expect Korvest to continue compounding growth steadily through our forecast as they service increasing demand and pursue additional market share upon completion of their facility expansion in the short term. Major project awards provide upgrade potential to our base case estimates.
Korvest was valued at $166.1 million at the close of trade on Monday.
