Bank of America says small caps are at their cheapest in 14 months. Here are 12 stocks expected to soar by more than 100% to 200%, according to Wall Street’s top analysts.
- Bank of America says small caps are trading at a 19% discount.
- During economic recovery, small-cap stocks, especially value, tend to outperform.
- Below is a list of the sector’s names with the highest expected gains, as compiled by TipRanks.
If you’re planning to spend your hard-earned money on Black Friday sales, you should set aside some money for stocks.
Some stocks are also on sale, according to a recent note from Bank of America. Small caps, in particular, have been falling since July 31. The Russell 2000, the sector’s benchmark, has fallen nearly 16% since then. According to a November 13 note from equity strategists Jill Carey Hall and Nicolas Woods, the index’s forward price-to-earnings ratio is now at a 14-month low and the lowest since September 2022. Small-cap stocks are currently trading at a 19% discount.
According to Bank of America’s US Regime Indicator, value names have historically outperformed growth during an economic recovery, which is where we are now. However, small-cap stocks have generally outperformed mid- and large-cap stocks during recovery periods.
An October 26 note from Bank of America listed 1 3contenders among its buy-rated mid- and small-cap value names. Alarm.com Holdings (ALRM), e.l.f. Beauty (ELF), NMI Holdings (NMIH), Strategic Education (STRA), BellRing Brands (BRBR), BWX Technologies (BWXT), Celsius Holdings (CELH), Ciena Corporation (CIEN), Deckers Outdoor Corporation (DECK), RH (RH), Trex Company (TREX), and Wingstop (WING) are among them.
TipRanks, a stock-market research platform, compiles a list of strong-buy-rated stocks that top-rated Wall Street analysts most recommend for investors looking for higher returns.
TipRanks designates four or five-star ratings to the top 20 to 30% of analysts based on three main criteria:
- An analyst’s average returns
- Profits or losses on recommendations
- The volume of corrections and transactions they make
The 12 names below were pulled from TipRanks’s list of top strong-buy-rated stocks with the highest potential upsides within the small-cap category. They have “Smart Scores” above seven, referring to a TipRanks proprietary ranking system from one to 10 that measures eight factors, including how the best-performing analysts rate stocks, whether hedge funds are buying or selling, and fundamental and technical analysis.
1. 89bio
Ticker: ETNB
Market Cap: $563.09M
Top analysts’ price target: $28.00 (293.81% Upside)
2. Arcus Biosciences
Ticker: RCUS
Market Cap: $1.01B
Top analysts’ price target: $47.00 (255.25% Upside)
3. Viking Therapeutics
Ticker: VKTX
Market Cap: $978.28M
Top analysts’ price target: $33.33 (243.96% Upside)
4. 4D Molecular Therapeutics
Ticker: FDMT
Market Cap: $464.69M
Top analysts’ price target: $33.00 (213.39% Upside)
5. Syndax Pharmaceuticals
Ticker: SNDX
Market Cap: $943.63M
Top analysts’ price target: $36.33 (169.71% Upside)
6. Vir Biotechnology
Ticker: VIR
Market Cap: $1.18B
Top analysts’ price target: $23.00 (161.66% Upside)
7. Aspen Aerogels
Ticker: ASPN
Market Cap: $642.15M
Top analysts’ price target: $23.00 (151.09% Upside)
8. Scholar Rock
Ticker: SRRK
Market Cap: $724.68M
Top analysts’ price target: $24.50 (159.95% Upside)
9. Treace Medical Concepts
Ticker: TMCI
Market Cap: $382.19M
Top analysts’ price target: $14.80 (120.90% Upside)
10. Xencor
Ticker: XNCR
Market Cap: $1.04B
Top analysts’ price target: $40.50 (141.36% Upside)
11. Cabaletta Bio
Ticker: CABA
Market Cap: $711.71M
Top analysts’ price target: $37.00 (111.91% Upside)
12. IHS Holding
Ticker: IHS
Market Cap: $1.83B
Top analysts’ price target: $11.33 (100.89% Upside)
