This trio of small caps come with risks, but also offer outsized returns for the stout-hearted, writes Ben Shepherd of Personal Finance.

Mega-cap stocks offer a margin of safety...at a cost. Meaningful earnings growth is harder—and more expensive—to come by for companies at the top of the food chain.

But for the small fry, an acquisition or organic expansion can send earnings into the stratosphere, producing big gains for shareholders. Moreover, many of these stocks haven’t found their way onto analysts’ radar screens, making it easier to find undervalued names that the market doesn’t understand.

Our proprietary screening process turned up small-cap companies that continue to reap the rewards of investing heavily in their own businesses.

For downside protection, we’ve focused on stocks that trade at a discount to their peers or their own historical price-to-earnings ratios. As always, clean balance sheets are a must.

AmSurg Corp (AMSG)
The health care industry has struggled against the uncertainties associated with health-care reform and a customer base buffeted by elevated unemployment, minimal wage growth, and rising out-of-pocket costs for medical treatments.

AmSurg operates 202 outpatient surgery centers in partnership with local medical groups, and continues to wrestle with these challenges. Despite these headwinds, several factors make AmSurg’s shares a compelling buy if you have a longer time horizon.

Over the long term, an aging US population should continue to drive demand for health care services. Buy AmSurg under $30.

Vascular Solutions (VASC)
Although cardiovascular disease is one of the leading causes of death in the US, America doesn’t have sole purchase on heart ailments; as consumers in emerging markets eat fattier foods and adopt increasingly sedentary lifestyles, these nations will face their own epidemic.

Vascular Solutions is well-positioned to benefit from this trend. It's a buy under $15 for aggressive investors.

Synaptics (SYNA)
This company designs and sells human-interface technology for a host of consumer electronics, including the touch pad on your laptop and the click wheel on early iterations of Apple’s (AAPL) iPod.

In recent years, the company has shifted its emphasis from manual interface technologies to touch-screen applications, winning design work for Research in Motion’s (RIMM) Blackberry smart phones and handsets that run Google’s (GOOG) Android operating system.

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