Quant Sector Ranking (as of 11/1): 10 out of 619 These characteristics are currently found in the below five stocks under $10. And where past performance is not a guarantee of future results, a focus on stocks with attractive collective financial traits like valuation, strong growth, EPS revisions, profitability, and momentum, can offer upside for a portfolio. But over long periods, small-caps have paid out handsomely, especially those based on our Quant System. Where the markets reacted well initially to the latest 75-basis point hike, cheap stocks with a lot of leverage can quickly sell off sharply when rising interest rates are threatened, and emotions dictate the markets.
equity asset classes, small caps can have whipsawing price swings, especially amid rising rates that can affect the outlook of individual stocks. The Up and Down of Small-Caps (Royce Invest)Īs the riskiest of U.S. Will they see a turnaround from the up and down third quarter when the Russell 2000 Index gained +18%, only to fall and continue to trade -18% YTD? Only time – and investment – will tell. Historically, they have outperformed large-cap stocks, but this year, they have taken a big hit. With a market capitalization between $300 million and $2 billion, small-cap stocks can offer excellent opportunities for long-term growth. I take the emotion out of investing to make an objective, unemotional evaluation of each stock based upon data that includes a company’s financials and analyst estimates so that only the stocks possessing the strongest fundamentals have strong buy ratings. Stocks' Total Return (Seeking Alpha Premium) The expectation for earnings growth of Russell 2000 companies in 2022 is 30%, well above the 9% forecast for the S&P 500.” Although there is still a lot of volatility in the markets, historically, November and December are the best months for investing in terms of frequency of growth, giving way to the phenomenon known as the “Santa Clause Rally.” Although my stock picks are cheap, they are micro- and small-caps found by way of Top Stocks Under $10 through my proprietary quantitative system. As I referenced in previous articles, Goldman Sachs analysts “believe small cap stocks can continue to outperform in 2022. October began a turnaround, which is why considering some Strong Buy small-cap stocks for a portfolio may prove beneficial. The small-cap rut this year has given way to significant losses, especially in September. But we’re beginning to see a change in sentiment towards greed. The market pullback has concerned investors whose sentiment has leaned towards fear for most of the year. The average performance of those 53 stocks is up 2.55% compared to the S&P 500 performance, -16.04%, and Small Cap Russell Index, down 19.61%. One year ago, Seeking Alpha’s quant screener contained 53 stocks under $10 rated Strong Buys.
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