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The Zacks Analyst Blog Highlights: BG Staffing, First Community, City Office, America's Car-Mart and Hallmark Financial

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For Immediate Release

Chicago, IL –August 17, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: BG Staffing, Inc. (BGSF - Free Report) , First Community Corp. (FCCO - Free Report) , City Office REIT, Inc. (CIO - Free Report) , America's Car-Mart, Inc. (CRMT - Free Report) and Hallmark Financial Services, Inc. (HALL - Free Report) .

Here are highlights from Thursday’s Analyst Blog:

U.S. Small Business Sentiment at 35-Year Highs: 5 Top Picks

Small business owners are undoubtedly leading this economy and the expressed optimism has measured up to the second-highest level in history. Such businesses continue to expand and expect to gain from improved business conditions in the near term.

Due to their limited international exposure, small businesses offer higher protection than their large- and mid-cap counterparts against the effects of deepening Turkey crisis on markets. Thus, investing in small-capitalization stocks seems sensible at the moment.

Small Business Optimism Nears All-Time High

Small business owners’ optimism climbed to a 35-year high, with most of them setting records in terms of job creation and hiring despite concerns about lack of qualified workers. By the way, small business houses were able to increase prices of their products, another signal of just how strong the current economy is for them.

NFIB’s Small Business Optimism Index touched its second-highest level in the survey's 45-year history at 107.9, just falling short of the July 1983 record-high of 108. On a seasonally-adjusted basis, a record 23% business are planning to create new jobs, while 37% acknowledged job openings that they could not fill last month. Meanwhile, 59% of firms are hiring or at least trying to hire.

Another record 35% of owners expect business conditions to improve in the near term, with many looking forward to increasing the compensation they offer workers.

NFIB President and CEO Juanita Duggan said that “small business owners are leading this economy and expressing optimism rivaling the highest levels in history.” She added that “expansion continues to be a priority for small businesses that show no signs of slowing as they anticipate more sales and better business conditions.”

CNBC/SurveyMonkey Small Business Survey’s Q3 Confidence Index hit a record high of 62. All in all, 58% of small business owners surveyed said that business conditions are “good”, at more than 53% last quarter from 39% a year ago. The data is in line with findings from small-business groups like Wells Fargo/Gallup.

Jon Cohen, chief research officer for SurveyMonkey, said that “this feels like a much more solid footing because of the assessment of how things are going today for small businesses, with 58 percent saying conditions are good.” President Trump may have done a good job, but it’s really the underlying business conditions that have improved by leaps and bounds, he accredited.

Small Business Fairly Immune to US-Turkey Trade Spat

Small businesses, by the by, have high domestic exposure in terms of revenue generation, which for the time being is shielding them from international disputes. Lest we forget, a recent plunge in the Turkish lira and its devastating effects on global economies unnerved investors, sparking a selloff on Wall Street.

The Dow Jones Industrial Average fell 0.5% on Aug 15. The blue-chip index has now spent the longest period in correction territory, per Dow Jones Market Data. The broader S&P 500 also closed down 0.8% at 2,818 and the tech-laden Nasdaq Composite index dropped 1.2% to 7,774.12.

Tensions between the United States and Turkey soared recently over a couple of issues, including the detention of American pastor Andrew Brunsonin Turkey and the Syrian civil war. Trump recently approved higher tariffs on imports from Turkey, levying a 20% duty on aluminum and 50% on steel.

Trump’s approval of higher tariffs on imports from Turkey ripped the Turkish financial markets, sending lira into a freefall. Turkey, in turn, slapped hefty tariffs on U.S. products, including cars, alcohol and tobacco (read more: Turkey Crisis Spills Over to Wall Street: Winners & Losers).

Time to Think Small: 5 Solid Buys

Banking on the aforesaid positives, investing in small-cap stocks seems judicious. Notably, the prominent index for small-caps, the Russell 2000 index has jumped 7.8% so far this year, higher than the Dow’s increase of 1% and the S&P 500’s rise of 5.4%.

We have, thus, selected five small-caps that should make meaningful additions to your portfolio. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.

BG Staffing, Inc. provides temporary staffing services in the United States. Currently, the company has a Zacks Rank #2 and a VGM Score of A. In the last 60 days, two earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings surged 23.5% in the same period. The company’s projected growth rate for the current year is 61.4%, while the Staffing Firms industry is projected to rise 11.3%.

First Community Corp. operates as the bank holding company for First Community Bank which offers various commercial and retail banking products and services to small-to-medium sized businesses, professional concerns, and individuals. The company currently has a Zacks Rank #2 and a VGM Score of B. In the last 60 days, two earnings estimates moved up, while none moved down for the current year. The Zacks Consensus Estimate for earnings increased 2.7% in the same period. The company’s projected growth rate for the current year is 39.5%, while the Banks - Southeast industry is estimated to increase 30.7%.

City Office REIT, Inc. invests in high-quality office properties in mid-sized metropolitan areas with strong economic fundamentals, primarily in the Southern and Western United States. Currently, the company has a Zacks Rank #2 and a VGM Score of B. In the last 60 days, three earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings advanced 1.8% in the same period. The company’s projected growth rate for the current year is 17.5%, while the REIT and Equity Trust - Other industry is expected to grow 1.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

America's Car-Mart, Inc. operates as an automotive retailer in the United States. Currently, the company has a Zacks Rank #2 and a VGM Score of A. In the last 60 days, one earnings estimate moved up, while none moved down for the current year. The Zacks Consensus Estimate for earnings increased 0.7% in the same period. The company’s projected growth rate for the current year is 28.3%, while the Automotive - Retail and Whole Sales industry is likely to rise 17.9%.

Hallmark Financial Services, Inc. markets, distributes, and services property/casualty insurance products to businesses and individuals in the United States. Currently, the company has a Zacks Rank #1 and a VGM Score of A. In the last 60 days, one earnings estimate moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings jumped 10.7% in the same period. The company’s projected growth rate for the current quarter is 322.2%, while the Insurance - Property and Casualty industry is expected to decline 22.1%.

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