Are Genel Energy plc, ITE Group plc and Findel plc 3 must-have small-caps?

FTSE 100 Share pries going up
FTSE 100 Share pries going up

Today's half-year results from events specialist ITE(LSE: ITE) show that the company is making encouraging progress. Its top line increased by 13% versus the same period of the prior year due mainly to acquisitions as well the company's gradual pivot away from Russia, where trading remains challenging but prospects are improving.


This rise in revenue contributed to an increase in pre-tax profit of 36%, which was aided by fewer one-off costs versus the previous year. But with dividends per share falling by 40% as a higher dividend coverage ratio is sought by ITE, income investors may not be overjoyed about the update.

Looking ahead, ITE seems to have a sound strategy through which to navigate the challenges which it faces in Russia. Its diversification strategy should aid its long-term financial performance and with a new CEO set to take over in September and ITE due to grow its bottom line by 8% next year, investor sentiment could pick up and push the company's share price higher. That's especially the case since it trades on a price-to-earnings-growth (PEG) ratio of only 1.7, which indicates that it offers good value for money.

Upside potential

Similarly, Findel(LSE: FDL) also appears to offer significant capital gain potential. Its restructuring seems to be a sensible strategy, with Kleeneze and Kitbag both being sold-off recently. The more streamlined Findel seems to have bright future prospects, with its bottom line forecast to rise by 11% in the current year and then by a further 19% next year. This has the potential to provide a step-change in investor sentiment, with Findel's PEG ratio of just 0.3 indicating that it has major upside potential.

Certainly, Findel is undergoing a significant period of change at the moment and with its track record of financial performance being somewhat volatile, many investors may view it as being a risky stock to hold. However, with it having such a wide margin of safety, Findel's risk/reward ratio holds significant appeal and it could begin to reverse the 15% fall in its share price which has been recorded since the turn of the year.

Change at the top

Meanwhile, Genel Energy(LSE: GENL) has today announced the appointment of a new Chief Operating Officer (COO). While this may not significantly move Genel's share price in either direction, the rising price of oil has the scope to do so. In fact, with oil having risen by around 60% since its lows earlier this year, sentiment towards the wider oil sector could pick up if the profitability of the industry's incumbents improves.

For example, shares in Genel have risen by 36% in the last month alone and looking ahead, a rising oil price could lift the company's valuation yet further. However, with Genel having significant geopolitical risk within the Northern Iraq/Kurdistan region as well as a major impairment due in the current year's accounts from a lowering of reserves estimates, there appear to be better options elsewhere within the oil sector for investors seeking to benefit from a rising oil price.

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Peter Stephens owns shares of Findel. The Motley Fool UK has recommended ITE Group. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.