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When choosing stocks, you want to make sure the industry your stocks belong to has potential.  After this, you want to select picks within that outperforming industry which are set to grow and build momentum, especially going into earnings reports. 

Fortunately, we have found a duo of companies that fit this bill and could be interesting selections for investors looking for small cap picks. Below, we will assess why we believe Kona Grill (KONA) and Mavenir Systems (MVNR) are set to deliver positive results when they report earnings. 

And it is important to note that both of their earnings will be announced before the end of February.  So investors have enough time-- but not a great deal-- to consider these stocks before their imminent reports:

Kona Grill-KONA

Kona Grill is an American grill and sushi bar, originally based in Arizona, which has since expanded further throughout the US, with about 30 restaurants.  Kona Grill has new choices for customers, and announced the launching of its new Zest Menu.  It will be interesting to see how this seasonal expansion of the 6 new items pans out for KONA.

Kona Grill has upgraded in the last week, going from a Zacks Rank #2 (Buy), to a Zacks Rank #1 (Strong Buy).  The Zacks Rank #1 along with a positive Earnings Expected Surprise Prediction of 11% suggests that the stock is likely to outperform our consensus estimate. 

It is worth noting that the stock has a beta of .59, so there is typically less volatility associated with it.  KONA has posted positive surprises in 3 of the last 4 quarters, so it has done a good job of beating recent analyst expectations.  The earnings release is just around the corner, to be reported on 2/12/15.
 
Mavenir Systems-MVNR

Mavenir Systems inc. is a telecommunications networking service provider, based in Texas.  They service customers by providing software based telecommunications networking solutions.  More specifically, the company’s software aims to deliver rich voice and video communication, as well as optimized messaging services to clients.

Mavenir currently holds a Zacks Rank #2 (Buy). Their growth rate for this year is 72.9%, compared to 26.8% for the industry, while it is worth noting that the growth rate for the S&P 500 was 9%.  This shows that MVNR is already excelling within an industry that is outperforming the market.  In fact, the communication network software industry is among the top 5.66% of industries on the Zacks Industry List. 

MVNR has posted an EPS surprise of at least 38% in each of the last 3 quarters, indicating that there is positive trend in motion for Mavenir Systems. Given the stock's strong rank and brighter long term prospects, investors should also look at this small cap ahead of its earnings on 2/26/15.

  Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
MAVENIR SYSTEMS (MVNR): Free Stock Analysis Report
 
KONA GRILL INC (KONA): Free Stock Analysis Report
 
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