Are there any sectors or industries of any market cap that have simply been overlooked by the bulls and the media over the last twelve months? Sure, and they're very undervalued as a result. We'll take a closer look at those unsung heroes below. First though, highlights from the community this week include looks at China TransInfo Technology (CTFO), Synta Pharmaceuticals (SNTA), Atlantis Technology Group (ATNP), Euro Tech Holdings (CLWT), Inspire Pharmaceuticals (ISPH), and Merge Healthcare (MRGE).   Stocks In Focus CTFO & CPBY: Watching Those Who Watch the Chinese How do you handle overcrowded streets and traffic jams? Ask China TransInfo Technology Corp. (NASDAQ:CTFO), as the company specializes in managing traffic and mass transit, among other things. Ken Tudor highlights some of the opportunities created by en ever-growing urban population in China that China TransInfo Technology Corp. is capitalizing on.  Buy These While They Are Cheap: SNTA, BELM, PSUN Looking for a stock that was severely undervalued recently but is starting to make a nice recovery? Synta Pharmaceuticals Corp. (NASDAQ:SNTA) may fit the bill. Dennis Askew has deemed the stock a near-term 'buy' on news that Synta Pharmaceuticals renewed its research on a skin cancer treatment after further discussion with the FDA on the matter.  Chart Outlooks: CNAM, APPA, ATNP If you were counting on Atlantis Technology Group (OTC:ATNP) making a recovery following its recent soft patch, you may want to take a look at the chart James Brumley plotted yesterday. It indicates a bit of bad news.... the stock's fallen under a major floor. From here, Atlantis Technology Group shares could practically be whittled away to nothing.  Technical Reviews of CLWT, CZICF, and BEE Did Euro Tech Holdings Co. Ltd. (NASDAQ:CLWT) clear an important hurdle today after that resistance level was drawn just yesterday? Possibly. If the stock can hold onto yesterday's gains and establish a base around its new level, Euro Tech Holdings just tipped the risk/reward scale very much in the bulls' favor.  Don't Let Profit-Taking Scare You: NLST, ISPH, SQNM The shorts seem to have a temporary effect on Inspire Pharmaceuticals, Inc. (NASDAQ:ISPH) from time to time, but in the bigger picture, ISPH is rising (and has been a good stock to buy on its dips). That's got a lot to do with persistently-solid improvement in Inspire Pharmaceuticals' numbers. Dennis Askew has the whole story - check it out. Getting In On Big Performers: MRGE, CELM, PLXT The possibility of a new partnership and a potential acquisition couldn't have come at a better time for Merge Healthcare Inc. (NASDAQ:MRGE). The stock, which had been in a strong downtrend until Wednesday, finally broke that losing streak. Not only is the company now developing mobile healthcare applications, but so far, Merge Healthcare Inc. is the lead bidder for one of its competitors; it would translate into a lot of synergy if it all materializes.   The Market's Secret Stash Having spent the better part of the last two months talking about market dynamics like earnings, correction timelines, home sales, interest rates, and what a 'short-term bottom' should look like, I'm glad to take a bit of a break today and dive into something a little more stock-specific.  What is the market's so-called 'secret stash'? It's a term I'm using to describe a group of stocks that's well undervalued on a historical and forward-looking basis, but nobody realizes it.  Investors don't realize it primarily because most of them can't look past the large caps in the group to see that the smaller names in the same sector offer a radically different valuation.  Oh, I can understand how it happens. The rising tide lifted all boats equally in 2006, and a disastrous 2008 torpedoed all stocks regardless of size, style, and sector. Now, however, as the economy continues to solidify, we're starting to see a familiar small cap/large cap disparity growing again. The old "all or nothing" mentality doesn't fully maximize stock-picking opportunities. So....  The market's best-kept secret right now is..... small cap consumer staples stocks. Don't laugh - I know they're not the sexiest of stocks here at what's likely to be the beginning of the heart of an economic growth phase. Sometimes though, the prices of low-growth 'value' stocks just make more sense than the usual high prices of high-growth names.  The underlying numbers support the bullish outlook for the group.  While the trailing-twelve-month operating P/E 19.1 for the S&P 600 consumer staple equities isn't exactly cheap from a historical perspective, among small caps, that's actually the second-cheapest sector on a look-back basis. (Small cap utilities boast the lowest valuation right now, with a TTM P/E of 16.05).  On a forward-looking basis, the projected P/E of 17.20 for the small cap consumer goods names is cheaper than almost any other sector of any other market cap. The mid-cap staples stocks and all utilities names are the only real rivals. The former supports the staples theme, while the latter isn't even a meaningful comparison. (I have serious and justifiable doubts about mid-cap materials and energy stocks meeting the aggressive 2010 earnings targets, which is why I don't consider them in the comparison even though they're on the nearby table.)  And bear in mind that the 'average' P/Es are often pumped up by only handful of very marginal performers with high P/E readings; there are quite a few stocks in the arena with low single-digit price multiples, past and projected. This seemed particularly true within my review of the small cap staples stocks.  The question you're probably asking (or should be anyway) is whether or not those forecasted results driving such a low projected P/E are even plausible. Well, they are. The earnings level it would take to reach that targeted P/E isn't significantly higher than current earnings levels. And, some of the major names in this sliver of the market have not only been more profitable lately than in the recent past, but have been topping expectations on a regular basis.  For instance, Warnaco Group (WRC) has topped estimates in two if its last four quarters [and was profitable the entire time], and is very likely to turn its trailing P/E ratio of 30.2 into the expected P/E of 12.1. Central European Distribution Corp. (CEDC) has topped estimates in each of its last four quarters, making its projected P/E of 11.2 easily within reach of the trailing earnings-multiple of 18.8. Meat processor Sanderson Farms, Inc. (SAFM) has also topped forecasts in each of its last four quarters, and is pretty much at its expected 2010 P/E of 9.7 with the trailing-twelve-month price/earnings ratio of 9.9. Getting to there from here - and perhaps beyond - isn't even a question for most.  Anyway, you get the idea.... between their size and ho-hum products, these stocks aren't getting much media attention. A bunch of them are still great stocks though, and given time will be properly valued. The fact that they're not right now is your opportunity. Go fishing.    We Value Your Feedback Got comments, questions or suggestions? Send 'em on over: Email the Editor If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC  4653 Carmel Mtn Rd  Suite 308 #402  San Diego, CA 92130   Share the SCN Newsletter If you find the Small Cap Network Newsletter informative and profitable, please forward our newsletter alert service to like-minded friends and associates who share similar market interests.   Ensure Newsletter Delivery To ensure newsletter delivery, you can add any additional email addresses you may have to the Small Cap Network Member List. 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