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Power Play: Time to look at small-cap stocks

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

Small-caps are taking a big hit in the market sell-off this year. The Russell 2000 has tumbled 15 percent year-to-date compared to the S&P 500, which is only down about 10 percent.

Intrepid Capital Funds President and Portfolio Manager Mark Travis tells CNBC's "Power Lunch" on Tuesday he is beginning to see value in smaller names.

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"Look at something that pays a reasonable dividend at a discount. It will get easier to find if the market keeps moving in this direction," Travis said.

Two companies he likes are Cubic Corp and American Science & Engineering, which have exposure to defense.

Cubic runs ticketing systems for subways and American Science & Engineering has X-ray technology to scan people and cargo.

"With all that's going on in the world, these businesses will grow or will be acquired," Travis said.

Cubic and American Science & Engineering are lower during trading.