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5 Top Small-Cap Stocks Braving Coronavirus Bloodbath
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The rapid spread of coronavirus worldwide and its devastating impact on the U.S. and global economy is coming to the forefront every day. Most of the industries are suffering thanks to the deadly virus and small businesses are feeling more pain than their large-cap peers.
However, even at this juncture, a handful of small-cap stocks have skyrocketed defying the coronavirus-induced market mayhem and extreme volatility. Some of them have a favorable Zacks Rank and strong growth potential.
Small Businesses Suffering the Most
The small-cap specific the Russell 2000 index entered the bear market on Mar 9. Notably, the three large-cap specific indexes — the Dow, the S&P 500 and the Nasdaq Composite — also entered the bear territory on Mar 11 and 12. However, these three indexes manage to come out of the bear territory on Mar 26, Apr 8 and Apr 14, respectively.
In contrast, the Russell 2000 is still in the bear market. The index is currently nearly 30% below its latest high recorded on Jan 17. Another major small-cap specific index, the S&P 600 has plunged 31.6% year to date.
Owing to their predominantly domestic-focused business strategy, these companies are highly dependent on the spending of U.S. consumers as well as businesses. However, the lockdown imposed by a large number of states significantly reduced demand from both individuals and medium and large businesses.
Also, given their small-scale of operations, small businesses are generally cash-starved in nature. These organizations operate on a thin profit margin and most new businesses are yet to achieve profitability.
A recent study by the National Small Business Association revealed that more than 50% of the U.S. small businesses are witnessing massive lack of demand and 38% are not confident about the financial prospect of their businesses. According to Main Street America, approximately 7.5 million small businesses in the United States are at risk of closing their operations if the coronavirus pandemic persists for the next few months.
U.S. Government Stimulus
However, on Mar 27, the U.S. government released a relief package of $349 billion in forgivable loans to small businesses provided the firms maintain their payrolls. Moreover, on Apr 21, The US Senate approved a $480 billion coronavirus relief package with funding earmarked for devastated small businesses, overwhelmed hospitals and a ramp-up of testing nationwide during the pandemic.
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 stocks that have jumped in the past month. These stocks have strong growth potential and have robust earnings estimate revisions in the last 30 days. Finally, 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 month.
Cue Biopharma Inc. (CUE - Free Report) develops biologic drugs for the selective modulation of the human immune system to treat a range of cancers, chronic infectious diseases and autoimmune disorders. The company has an expected earnings growth rate of 19.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 4.3% over the past 30 days. The stock price has soared 3.8% in the past month.
PJT Partners Inc. (PJT - Free Report) is an investment bank that provides various strategic advisory, shareholder engagement, restructuring and special situations, and private fund advisory and placement services to corporations, financial sponsors, institutional investors and governments worldwide. The company has an expected earnings growth rate of 26.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 3.8% over the past 30 days. The stock price has rallied 36.5% in the past month.
Avenue Therapeutics Inc. (ATXI - Free Report) is a specialty pharmaceutical company that acquires, licenses, develops and commercializes products primarily for use in the acute/intensive care hospital setting. The company has an expected earnings growth rate of 54.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 34.8% over the past 30 days. The stock price has climbed 33.3% in the past month.
SpartanNash Co. (SPTN - Free Report) is a food distributor serving military commissaries and exchanges in the United States. It operates in three segments: Food Distribution, Military and Retail. The company has an expected earnings growth rate of 26.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 13% over the past 30 days. The stock price has appreciated 31.4% in the past month.
Gaia Inc. (GAIA - Free Report) operates a digital video subscription service and online community for underserved member base worldwide. It has a digital content library of nearly 8,000 titles in English, Spanish, German, and French languages available to its subscribers on Internet-connected devices. The company has an expected earnings growth rate of 59.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 14.9% over the past 30 days. The stock price has surged 30.4% in the past month.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
5 Top Small-Cap Stocks Braving Coronavirus Bloodbath
The rapid spread of coronavirus worldwide and its devastating impact on the U.S. and global economy is coming to the forefront every day. Most of the industries are suffering thanks to the deadly virus and small businesses are feeling more pain than their large-cap peers.
However, even at this juncture, a handful of small-cap stocks have skyrocketed defying the coronavirus-induced market mayhem and extreme volatility. Some of them have a favorable Zacks Rank and strong growth potential.
Small Businesses Suffering the Most
The small-cap specific the Russell 2000 index entered the bear market on Mar 9. Notably, the three large-cap specific indexes — the Dow, the S&P 500 and the Nasdaq Composite — also entered the bear territory on Mar 11 and 12. However, these three indexes manage to come out of the bear territory on Mar 26, Apr 8 and Apr 14, respectively.
In contrast, the Russell 2000 is still in the bear market. The index is currently nearly 30% below its latest high recorded on Jan 17. Another major small-cap specific index, the S&P 600 has plunged 31.6% year to date.
Owing to their predominantly domestic-focused business strategy, these companies are highly dependent on the spending of U.S. consumers as well as businesses. However, the lockdown imposed by a large number of states significantly reduced demand from both individuals and medium and large businesses.
Also, given their small-scale of operations, small businesses are generally cash-starved in nature. These organizations operate on a thin profit margin and most new businesses are yet to achieve profitability.
A recent study by the National Small Business Association revealed that more than 50% of the U.S. small businesses are witnessing massive lack of demand and 38% are not confident about the financial prospect of their businesses. According to Main Street America, approximately 7.5 million small businesses in the United States are at risk of closing their operations if the coronavirus pandemic persists for the next few months.
U.S. Government Stimulus
However, on Mar 27, the U.S. government released a relief package of $349 billion in forgivable loans to small businesses provided the firms maintain their payrolls. Moreover, on Apr 21, The US Senate approved a $480 billion coronavirus relief package with funding earmarked for devastated small businesses, overwhelmed hospitals and a ramp-up of testing nationwide during the pandemic.
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 stocks that have jumped in the past month. These stocks have strong growth potential and have robust earnings estimate revisions in the last 30 days. Finally, 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 month.
Cue Biopharma Inc. (CUE - Free Report) develops biologic drugs for the selective modulation of the human immune system to treat a range of cancers, chronic infectious diseases and autoimmune disorders. The company has an expected earnings growth rate of 19.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 4.3% over the past 30 days. The stock price has soared 3.8% in the past month.
PJT Partners Inc. (PJT - Free Report) is an investment bank that provides various strategic advisory, shareholder engagement, restructuring and special situations, and private fund advisory and placement services to corporations, financial sponsors, institutional investors and governments worldwide. The company has an expected earnings growth rate of 26.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 3.8% over the past 30 days. The stock price has rallied 36.5% in the past month.
Avenue Therapeutics Inc. (ATXI - Free Report) is a specialty pharmaceutical company that acquires, licenses, develops and commercializes products primarily for use in the acute/intensive care hospital setting. The company has an expected earnings growth rate of 54.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 34.8% over the past 30 days. The stock price has climbed 33.3% in the past month.
SpartanNash Co. (SPTN - Free Report) is a food distributor serving military commissaries and exchanges in the United States. It operates in three segments: Food Distribution, Military and Retail. The company has an expected earnings growth rate of 26.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 13% over the past 30 days. The stock price has appreciated 31.4% in the past month.
Gaia Inc. (GAIA - Free Report) operates a digital video subscription service and online community for underserved member base worldwide. It has a digital content library of nearly 8,000 titles in English, Spanish, German, and French languages available to its subscribers on Internet-connected devices. The company has an expected earnings growth rate of 59.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 14.9% over the past 30 days. The stock price has surged 30.4% in the past month.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>