Though the rest of the market is freaking out today, savvy investors know this is a great day to go bargain shopping. That’s what I’m thinking anyway, as I continue my hunt for underestimated and underloved small caps. I came across three today…SuperGen, Inc. (NASDAQ: SUPG), Joe’s Jeans Inc. (NASDAQ: JOEZ), and Zix Corporation (NASDAQ: ZIXI). Two of them I’d feel comfortable enough recommending to my retired mom, and the third is right up there in terms of caliber – a real testament considering their size and lack of history.

Joe’s Jeans Inc. shares haven’t had a great 2011, falling from $1.60 to a low of $0.65 a couple of weeks ago. For that matter, JOEZ has been sinking since April of 2010 after peaking above $3.00.

Thing is, the company is profitable… it’s growing revenue too. Oh, it’s not been pretty – earnings are a little erratic even when taking the one-times off of the books. JOEZ is trading at a palatable (and believable) 16 times forward-looking earnings though, which is a better bargain than many other comparable names.

It’s been said about a zillion times, but here’s a zillion and one… timing is everything. While Zix Corporation doesn’t have much of a history (and a history of earnings growth in particular), there is a clear path towards a shrinking loss and – as of 2010 – a swing to profits that’s getting progressively bigger. ZIXI lost $0.09 per share in 2008, lost $0.07 in 2009, earned $0.11 in 2010, is on pace to earn $0.15 per share in 2011, and is expected to earn $0.22 per share on 2012. Given the rate of growth so far, there’s no reason to doubt it can’t do so.

But what about an excessive valuation, even by small cap stock standards? ZIXI is still trading at 27.9 times its expected earnings for the next four quarters. Yeah, it’s true that Zix Corporation won’t win any awards for being cheap right now. I’ve found, however, that these ‘coming alive’ stories can command a price premium, as the market’s thinking of what it should be worth three to five years down the road. [This is the one I’m not entirely sure I’d suggest to my mom.]

Finally, SuperGen, Inc. has been quietly doing its thing (making pharmaceuticals), while making money hand over first the whole time. How and why the market isn’t totally stoked about this one is beyond me.

That said, investors are warming up to SUPG, making it one of the more traded and more watched small caps over the last seven or so months. It just hasn’t helped the stock much…. or has it? We are seeing a clear pattern of higher lows now, backed by a hint of the bulls testing the waters. This consolidation may well be the calm before the storm. It’s all very subtle, but there.

Traders are most likely keying in on the fact that SUPG is trading at a very respectable trailing P/E of 10.7, and a forward-looking one of 30.0. Say what? Don’t worry – SuperGen has topped estimates almost every quarter since it swung to a profit in 2009. And, like Zix, this is a real ‘coming alive’ story with lots of earnings growth in tow.

If you’re thinking there are cheaper small cap stocks out there, on a trailing or projected basis, you’re right. I don’t necessarily equate a low P/E with being undervalued though. [It helps, but it’s not everything.] Reliability and plausibility go a long way un my book, as I’ve reaped bigger rewards by stocks that consistently grew earnings and topped expectations than I have with names that looked cheap on paper, but then couldn’t even live up to that low expectation.

That’s just me though.

I’m adding ZIXI to my public portfolio…. a proverbial sandbox where I can put ideas into action, and let others follow along as I make buy/sell decisions.

To learn more about, comment on, or see previous comments on these small cap stocks, just click on the linked tickers at the top of the story.

By the way, I ran across all these picks as part of a routine stock scan I run for my premium service called the Rhino Report. This newsletter utilizes a system to find great long-term breakout ideas from the small cap world, and I’m finding budding ideas long before the market does… giving subscribers a chance to get in early and let other investors bid those stocks up. ADLR, TRAD, GGC, and RTI are some of my recent (2011) quick-gainers. Check it out.