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Allied Motion (XNAS:AMOT)
Allied Motion Technologies designs, manufactures and distributes precision and specialty controlled motion products and solutions. These products and solutions are used in a broad range of industries such as automobile, medical, aerospace and defense. Allied Motion Technologies is based out of Amherst, New York, and has global operations across the U.S., Canada, South America, Europe and Asia.
The manufacturing stock has a market cap of $394 million and has an EPS of $1.52. It has a 52-week low of $19 and a 52-week high of $49.98. Allied Motion Technologies has an annual dividend yield of $0.12 per share. It trades more than 20,613 shares per day. The company generated revenue of $371 million in 2019.
Hovnanian Enterprises (XNYS:HOV)
Hovnanian Enterprises Inc is an American construction company that focuses on residential construction. The company specializes in single-family housing and multi-unit building construction in Texas, Arizona, California, Virginia, Florida, Illinois, Ohio, and Pennsylvania. Hovnanian Enterprises builds homes and communities that target first-time, move-up, and luxury homebuyers. Historically, home sales around Texas, especially Houston, Arizona, and California have been the leading sources of revenue. The company also focuses on land purchasing and development to support future construction efforts as well as mortgage services for its homebuyers.
YETI Holdings (XNYS:YETI)
YETI Coolers manufactures gear for outdoor activities. It designs, markets, retails and distributes a variety of premium products. These products include coolers, bags, cargo and other apparel. YETI has a growing number of customers throughout the U.S., Canada and Australia.
The lifestyle stock has a market cap of $6.79 billion and has an EPS of $1.12. It has a 52-week low of $15.28 and a 52-week high of $80.87. YETI has high liquidity and trades more than 711,438 shares per day. It generated revenue of $913 million in 2019.
IBEX Holdings (XNAS:IBEX)
IBEX Holdings Ltd is an end-to-end provider of technology-enabled customer lifecycle experience (CLX) solutions to optimize customer acquisition, engagement, expansion and experience for its clients. IBEX operates through Customer Acquisition and Customer Management segments. Customer Acquisition segment includes consumer-facing businesses and acquires customers for them. In this segment, customers are primarily acquired for clients in the telecommunications, cable, technology and insurance industries. Customer Management segment comprises the engagement, expansion and experience solutions. The suite of customer engagement solutions consists of customer service, technical support and other value added outsourced back office services. Most of the company’s revenue comes from US.
CarParts.com Inc is an online provider of automotive aftermarket parts and repair information. The company principally sells its products to individual consumers through its network of websites and online marketplaces. The company’s products consist of collision parts serving the body repair market, engine parts to serve the replacement parts market, and performance parts and accessories.
Eastman Kodak (XNYS:KODK)
Eastman Kodak Co is a United States-based company. The company operates via several business segments: Print Systems, Enterprise Inkjet Systems, Kodak Software, Brand, Film and Imaging, Advanced Materials and 3D Printing Technology and Eastman Business Park. The print systems segment which derives majority revenue offers digital and traditional products and services to various businesses, such as commercial print and book publishing, and this segment contributes over half of total revenue. The company has a global business presence, with overseas markets accounting for a majority of revenue.
When interest rates are low, small-cap stocks begin to shine and outpace larger companies in value. A small-cap stock is a stock with a market capitalization between $300 million and $2 billion. These stocks are just one of many asset classes you can hold in your investor portfolio to add a unique layer of diversification and potential, no matter where you are in your investing journey.
Finding small cap stocks to buy is more about knowing which companies are performing over the longterm, instead of trying to make a few bucks overnight.
Overview: Small Cap Stock
When you own a small-cap stock, it means that you own a share of a corporation with a smaller total market capitalization. Small-cap stocks are most often found in the tech, industrial, healthcare and financial service sectors. Some examples of companies trading as small cap stocks include:
- Southwestern Energy Company (NYSE: SWN)
- eHealth, Inc. (NASDAQ: EHTH)
- Cogent Communications Holdings, Inc. (NASDAQ: CCOI)
- LHC Group Inc (NASDAQ: LHCG)
Small-cap stocks typically have a total market capitalization of around $300 million to $3 billion — though these numbers aren’t set in stone. Market caps can fluctuate as the market does. Companies with less than $300 in market capitalization are usually considered “micro-cap” stocks, while those larger than $3 billion are generally considered “mid-cap” stocks.
Like large- and mid-cap stocks, there’s an index that tracks the performance of small-cap stocks as a whole. The Russell 2000 Index tracks the performance of the top 2,000 small-cap stocks in the country, excluding any company that’s trading for less than $1 per share.
Small-cap stocks can make a great addition to any portfolio because they have the potential for larger growth movements. This means that if you choose the right small-cap stocks, you’ll see more profits when compared to mid- and large-cap stocks that are moving at similar rates. Many small-cap stocks are also value stocks, which is good news for investors searching for stocks under $5.
Best Online Brokers for Small Cap Stock
Before you can begin investing in small-cap stocks (or any type of stock) you need to open an account with a broker. Browse our favorite online brokers when you find the best small cap stocks to buy.
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Features to Look for in Small Cap Stocks
Small-cap stocks tend to represent smaller or newer companies. This means that you should adjust your expectations when it comes to earnings, debt and growth.
Some key characteristics to look for when you compare small-cap stocks include:
- A trend toward lowering debt: Almost every small-cap stock will have some form of debt. In the cases of new tech companies, this debt often dwarfs the profits the company is returning in its early years. But more debt doesn’t need to be a killer — instead of looking at debt by dollar amount, compare this company’s current debt to the debt it reported last year. You should see a downward trend, and the company’s assets should be higher than its debt level.
- A lower price-earnings (P/E) ratio: A company’s P/E ratio compares a company’s profit to its current stock price. Small-cap stocks with a low P/E ratio can be an undervalued hidden gem. On the other hand, a high P/E ratio can indicate that a stock is overvalued and likely to see a drop in price.
- A trend toward year-by-year growth: When you compare small-cap stocks, you should see an upward growth every year. Because these offerings have much smaller starting sizes at the beginning of each quarter, promising small-cap stocks will show much more growth than mid- or large-cap stocks.
- Predictability: While it’s impossible to predict the movement of a stock, you should review the charts to ensure the stock is not on a roller coaster ride. It’s one thing to rally and experience selloffs, but it’s quite another to wildly traverse the chart in a manner that is difficult to understand.
Accenting Your Portfolio With Small Cap Stock
With a large potential for growth and plenty of stocks under $10, small-cap stocks can be attractive. However, it’s important to remember that small-cap stocks can also quickly lose value — and they may also show lower liquidity, which can mean trouble if you need to quickly exit your position.
Do your due diligence before you purchase a small cap stock, and only use small-cap stocks to complement a portfolio primarily made up of solid and safe index funds, mutual funds, bonds and large-cap offerings. The best small cap stocks to buy are only one part of your portfolio, but they can add significant value when chosen properly.