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Don't Miss These 5 Small Hidden Gems in Market's Turnaround
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Thanks to an impressive turnaround for the last three months, barring some occasional fluctuations, Wall Street has managed to exit the coronavirus-led bear market. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have jumped 43.6%, 42.8% and 52.5%, respectively, from their recent lows recorded on Mar 23.
Besides these large-cap centric indexes, the small-cap specific Russell 2000 Index has been performing strongly in the past three months, rallying 49% from its recent low recorded on Mar 18. Several small-cap stocks have skyrocketed more than 50% in the past three months. Here we have selected five with a favorable Zacks Rank and strong growth potential for the near future.
Unprecedented Fiscal and Monetary Stimulus
Small businesses suffered the most owing to the global outbreak of the deadly coronavirus, which forced the U.S. government to impose lockdowns for nearly two months. The economy came to a standstill during that period.
The Trump administration's decision to provide a massive restructuring package to small businesses greatly helped in reviving this space. On Mar 27, the government released a relief package of $349 billion in forgivable loans to small businesses, provided the firms maintain their payrolls.
Moreover, in April, the U.S. government approved a $480 billion coronavirus relief package with funding earmarked for devastated small businesses and overwhelmed hospitals, and to ramp up testing nationwide during the pandemic.
On Jun 15, the Fed initiated a lending program of up to $600 billion to small and mid-sized businesses. Under this program, businesses with up to 15,000 employees or revenues up to $5 billion will get loan in the range of $250,000 to $300 million for 5 years in floating rate.
The central bank will encourage retail banks to lend out to struggling companies and will purchase 95% of each loan extended under the facility.
Positive Development
On Jun 9, National Federation of Independent Business reported that the U.S. Small Business Optimism Index got a solid momentum in May, increasing to 94.4 from 90.9 in April. Eight of the 10 components of the index improved last month while two declined. Per the report, the majority of owners is optimistic about future business conditions and expects the ongoing recession to be short-lived.
Notably, small corporates create a significant amount of jobs in the U.S. economy. More than 50% of the newly created jobs in the private sector originate here. These people constitute a large part of customers for big businesses.
Our Top Picks
We have narrowed down our search to five small-cap (market capital , $1 billion) stocks that have skyrocketed more than 50% in the past three months with strong growth potential and robust earnings estimate revisions in past 30 days. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Calix Inc. (CALX - Free Report) provides cloud and software platforms, and systems and services required to deliver the unified access network in the United States, the Middle East, Canada, Europe, the Caribbean and internationally.
The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 9.1% over the past 30 days. The stock price has soared 119% in the past three months.
Donnelley Financial Solutions Inc. (DFIN - Free Report) operates as a risk and compliance solutions company in the United States, Europe, Asia, Canada, and Latin America. It offers content creation, management and distribution, as well as data analytics and multi-lingual localization services.
The company has an expected earnings growth rate of more than 39.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 20.7% over the past 30 days. The stock price has jumped 102.5% in the past three months.
ChannelAdvisor Corp. offers cloud-based e-commerce solutions and services. It solutions include marketplaces, comparison shopping, paid search, social campaigns, flex feeds, web stores and rich media.
The company has an expected earnings growth rate of 72.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 6.2% over the past 30 days. The stock price has climbed 99.6% in the past three months.
United Natural Foods Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. It operates through the Wholesale and Other segments.
The company has an expected earnings growth rate of 20.2% for the current year (ending July 2020). The Zacks Consensus Estimate for current-year earnings has improved by 14.7% over the past 30 days. The stock price has rallied 88% in the past three months.
Clearwater Paper Corp. (CLW - Free Report) produces and sells private label tissue and bleached paperboard products in the United States and internationally. It operates through two segments, Consumer Products, and Pulp and Paperboard.
The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days. The stock price has surged 58.8% in the past three months.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Don't Miss These 5 Small Hidden Gems in Market's Turnaround
Thanks to an impressive turnaround for the last three months, barring some occasional fluctuations, Wall Street has managed to exit the coronavirus-led bear market. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have jumped 43.6%, 42.8% and 52.5%, respectively, from their recent lows recorded on Mar 23.
Besides these large-cap centric indexes, the small-cap specific Russell 2000 Index has been performing strongly in the past three months, rallying 49% from its recent low recorded on Mar 18. Several small-cap stocks have skyrocketed more than 50% in the past three months. Here we have selected five with a favorable Zacks Rank and strong growth potential for the near future.
Unprecedented Fiscal and Monetary Stimulus
Small businesses suffered the most owing to the global outbreak of the deadly coronavirus, which forced the U.S. government to impose lockdowns for nearly two months. The economy came to a standstill during that period.
The Trump administration's decision to provide a massive restructuring package to small businesses greatly helped in reviving this space. On Mar 27, the government released a relief package of $349 billion in forgivable loans to small businesses, provided the firms maintain their payrolls.
Moreover, in April, the U.S. government approved a $480 billion coronavirus relief package with funding earmarked for devastated small businesses and overwhelmed hospitals, and to ramp up testing nationwide during the pandemic.
On Jun 15, the Fed initiated a lending program of up to $600 billion to small and mid-sized businesses. Under this program, businesses with up to 15,000 employees or revenues up to $5 billion will get loan in the range of $250,000 to $300 million for 5 years in floating rate.
The central bank will encourage retail banks to lend out to struggling companies and will purchase 95% of each loan extended under the facility.
Positive Development
On Jun 9, National Federation of Independent Business reported that the U.S. Small Business Optimism Index got a solid momentum in May, increasing to 94.4 from 90.9 in April. Eight of the 10 components of the index improved last month while two declined. Per the report, the majority of owners is optimistic about future business conditions and expects the ongoing recession to be short-lived.
Notably, small corporates create a significant amount of jobs in the U.S. economy. More than 50% of the newly created jobs in the private sector originate here. These people constitute a large part of customers for big businesses.
Our Top Picks
We have narrowed down our search to five small-cap (market capital , $1 billion) stocks that have skyrocketed more than 50% in the past three months with strong growth potential and robust earnings estimate revisions in past 30 days. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Calix Inc. (CALX - Free Report) provides cloud and software platforms, and systems and services required to deliver the unified access network in the United States, the Middle East, Canada, Europe, the Caribbean and internationally.
The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 9.1% over the past 30 days. The stock price has soared 119% in the past three months.
Donnelley Financial Solutions Inc. (DFIN - Free Report) operates as a risk and compliance solutions company in the United States, Europe, Asia, Canada, and Latin America. It offers content creation, management and distribution, as well as data analytics and multi-lingual localization services.
The company has an expected earnings growth rate of more than 39.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 20.7% over the past 30 days. The stock price has jumped 102.5% in the past three months.
ChannelAdvisor Corp. offers cloud-based e-commerce solutions and services. It solutions include marketplaces, comparison shopping, paid search, social campaigns, flex feeds, web stores and rich media.
The company has an expected earnings growth rate of 72.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 6.2% over the past 30 days. The stock price has climbed 99.6% in the past three months.
United Natural Foods Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. It operates through the Wholesale and Other segments.
The company has an expected earnings growth rate of 20.2% for the current year (ending July 2020). The Zacks Consensus Estimate for current-year earnings has improved by 14.7% over the past 30 days. The stock price has rallied 88% in the past three months.
Clearwater Paper Corp. (CLW - Free Report) produces and sells private label tissue and bleached paperboard products in the United States and internationally. It operates through two segments, Consumer Products, and Pulp and Paperboard.
The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days. The stock price has surged 58.8% in the past three months.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>