Still Finding Growth on the Cheap

Insiders of these two names have shown recent buying interest and both have solid projected growth prospects.

This market is a challenging one to trade. The recent rally feels long in the tooth, concerns around Europe and slowing worldwide growth remain and the "fiscal cliff" looms larger by the day. That being said, equities remain reasonably priced from a historical perspective -- especially with 10-year government yields far below 2%.

I am looking to deploy new cash into cheap equities on any pullbacks. One method I use to find bargains in a cautious market is to seek out stocks that have cheap valuations, solid projected growth prospects in 2013 and in which insiders have shown recent buying interest. Here are two that make the grade.

Quality Distribution (QLTY) provides transportation of bulk chemicals primarily in North America. It also engages in the transportation of fresh water, disposal water, and oil for the energy logistics markets.

Four reasons QLTY is undervalued at under $10:

1. The earnings story on this company is exciting. Quality made $0.70 a share in fiscal 2011 but is on track to make $0.97 a share in the 2012 fiscal year. Analysts have it pegged for $1.29 a share in earnings in fiscal 2013.
2. Projected revenue growth is impressive as well with analysts expecting between 13% to 15% sales increases annually in fiscal 2012 and fiscal 2013. The stock has a five-year projected PEG of less than 1 (.79).
3. A director purchased 15,000 shares according to recent filings. Over the past three months, there have been a total of 8 insider transactions and all of them are purchases.
4. The consensus in the analyst community is that the shares are significantly undervalued. The 11 analysts that cover QLTY have a median price target of $17 on the stock. Price targets range from $13 to $20 a share, all targets are substantially above the stock's current price.

Coeur d'Alene Mines (CDE) has silver and gold mining properties primarily located in the United States, Mexico, Bolivia, Argentina and Australia.

Four reasons CDE should appeal to growth investors at $19 a share:

1. The stock is at very bottom of its five year valuation range based on P/B, P/E, P/S and P/CF.
2. The company is projected to have explosive growth in fiscal 2013. Analysts have it moving from an expected $1.56 a share in earnings in fiscal 2012 to $2.64 a share in fiscal 2013 on a 17% revenue increase. Consensus estimates for the 2013 fiscal year have moved up a dime in the last week.
3. Recent filings shows a director just bought 5,000 shares. The stock is also very cheap, as it is trading at 82% of book value and just over 7x forward earnings.
4. The market is mispricing this miner's growth prospects. CDE has grown revenues at better than a 30% annual clip over the past five years and the stock sports a minuscule five year projected PEG (.26).

At the time of publication, Jensen was long QLTY.