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3 Top Small-Caps With Big Growth

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Some investors find small-cap stocks (under $1 billion market-cap) exciting investments, as their growth potential is nearly impossible to ignore.

Don’t we all dream of getting in early on the next big thing?

Small-caps sometimes get a bad rep, as their price swings can be a bit spooky for more conservative investors.

Still, plenty of small-caps turn into big long-term winners. These stocks typically have fewer analysts covering them, allowing investors a window to get in “early” before the rest of the crowd catches on and comes running.

Three small-caps with big growth prospects – Chico’s FAS , U.S. Silica Holdings Inc. (SLCA - Free Report) , and Titan Machinery (TITN - Free Report) – could all be attractive to those with higher risk tolerance.  

In addition, all three carry a Zacks Rank #1 (Strong Buy), indicating that their near-term earnings outlooks have turned bright over the last several months.

Below is a chart illustrating the year-to-date performance of all three stocks, with the S&P 500 blended in as a benchmark.

Zacks Investment Research
Image Source: Zacks Investment Research

Let’s take a closer look at each one.

U.S. Silica Holdings Inc.

U.S. Silica Holdings makes and markets commercial silica, a specialized mineral, to various attractive end markets in the United States.

Analysts have upped their earnings outlook across the board over the last several months, landing the stock into the highly-coveted Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

SLCA boasts an impressive growth profile; the Zacks Consensus EPS Estimate of $1.09 for its current fiscal year suggests an improvement of more than 340% Y/Y. And in FY23, the company’s bottom line is forecasted to expand a further 64%.

The projected earnings growth is paired with forecasted revenue increases of 38% and 18% in FY22 and FY23, respectively.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares appear reasonably priced; the company’s current forward price-to-sales ratio sits at 0.6X, a tick below its 0.7X five-year median and below its Zacks Basic Materials sector average.

SLCA boasts a Style Score of an “A” for Value.

Zacks Investment Research
Image Source: Zacks Investment Research

Titan Machinery

Titan Machinery owns and operates a network of more than 70 full-service agriculture and construction equipment stores. The company currently sports a Zacks Rank #1 (Strong Buy).

As we can see, analysts have moved their earnings estimates upward over the last few months.

Zacks Investment Research
Image Source: Zacks Investment Research

Titan Machinery’s earnings performance has been stellar; the company has exceeded the Zacks Consensus EPS Estimate by at least double-digit percentages in 12 consecutive quarters.

Just in its latest release, TITN penciled in a sizable 60% bottom line beat and a 2% sales surprise. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition, Titan Machinery has a favorable growth outlook for its current fiscal year (FY22); earnings are forecasted to soar more than 60% Y/Y on top of 36% top line growth.

The growth cools off in FY23, with estimates indicating a 5% pullback in earnings Y/Y and a revenue increase of 11%.

Chico’s FAS

Chico's FAS is a cultivator of brands serving the lifestyle needs of fashion-savvy women 30 years and older. Like the stocks above, analysts have taken a bullish stance on the company’s earnings outlook, pushing the stock into a Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

Similar to TITN, Chico’s FAS has been on an impressive earnings streak, exceeding earnings and revenue estimates in three consecutive quarters. In its latest release on November 22nd, CHS registered a 53% bottom line beat and delivered a 2% revenue surprise.

Zacks Investment Research
Image Source: Zacks Investment Research

And for the cherry on top, the company has a bright outlook; the Zacks Consensus EPS Estimate of $0.91 for its current fiscal year (FY23) indicates an improvement of more than 120% Y/Y. And for FY23, bottom line estimates indicate a further 10% of growth.

Bottom Line

Small-cap stocks are commonly found in many portfolios, as their growth potential can be irresistible.

Still, investors with a more conservative strategy may not find small-caps nearly as attractive as others do, as their price swings can sometimes be spooky.

Nonetheless, for those interested in small-caps with strong forecasted growth, all three stocks above – Chico’s FAS , U.S. Silica Holdings Inc. (SLCA - Free Report) , and Titan Machinery (TITN - Free Report) – could all be considered.

All three sport the highly-coveted Zacks Rank #1 (Strong Buy), indicating favorable earnings estimate revisions have recently occurred. 


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