📟 Five under-the-radar US small-cap and mid-cap compounders

Intro

In this latest report, I've uncovered a handful of lesser-known US small and mid-cap companies that have been compounding free cash flow at explosive rates in recent years.

These five businesses operate in sectors with strong structural tailwinds, enjoy attractive cash returns on capital, and (in some cases) trade at valuations that may not reflect their growth potential. Together they highlight why this corner of the market remains a good hunting ground for long-term investors.

The aim of this analysis was to find:

• US small and mid-caps, with
• Explosive free cash flow (FCF) growth over the last 3-5 years, that are
• Trading at attractive FCF yields.

This involved scouring through close to 1,000 companies in the S&P 400 (the US mid-cap index) and the S&P 600 (the US small-cap index).

I then applied a quality growth filter to the analysis, to identify those with good capital allocation, operating in sectors with good economics and tailwinds for future growth.

The result is five really interesting companies. Let's take a look.