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10 Best Small-Cap Growth Stocks to Buy Now

In this piece, we will take a look at the ten best small-cap growth stocks to buy now. For more stocks, head on over to 5 Best Small-Cap Growth Stocks to Buy Now.

Every day, countless stocks see their values rise and fall on the market. Data from the World Federation of Exchanges shows that as of Q1 2022, a whopping 58,200 companies were listed on all of the world’s stock exchanges. This figure has only grown, with the latest data from the same body showing that as of April 2023, the total number of publicly traded firms stood at 58,301. These firms had a combined market value of $105 trillion with $9.8 trillion of shares being traded. Most of the listed companies were in the Asia Pacific region, which accounted for 55.2% or 32,171 of the total listed shares. Naturally, this also led to most of the trades being carried out in these markets as well, with 2.3 billion trades carried out in the region out of the total 3.3 billion trades.

Within these thousands of companies, there are several ways to classify the firms. One of these comes from the Financial Industry Regulatory Authority (FINRA), which is a private American regulator of brokerages. The FINRA categorizes stocks along micro cap, small cap, mid cap, large cap, and mega cap – with mega-cap stocks defined as those that have a market capitalization greater than $200 billion, while small caps have a market capitalization that ranges between $250 million and $2 billion.

Out of these, small caps often catch attention in the media, since their relatively stable business models combined with low share prices provide both a chance at share price growth and attractive entry points. But as is with the case with most aspects of the financial world, intuitive explanations often fail to hold their ground against research. On this front, research from Northwestern University shows that while small-cap stocks do offer the potential for high returns, they also carry higher risk when compared to large and mega cap stocks. Building on this, researchers from Brazil took an interesting look at small caps, as they investigated whether a crossover moving average trading strategy employed through portfolios of large cap and small-cap stocks would yield any differences in profitability. The researchers found that large cap stocks do not offer any significant benefits in terms of profitability, a conclusion that is generally thought counterintuitive in emerging markets due to high levels of liquidity.

Moving back to America, and looking at what’s going on in the small-cap market right now, investment firm Royce Investment Partners which is known for its focus on small-cap stocks has some data for how the market performed during the first quarter of this year. It shows that small-cap stocks gained 13.7% year to date until the start of February when interest rate hikes from the Federal Reserve and growing rhetoric for a recession pushed them down. This led the Russell 2000 index to drop from posting almost 15% in returns by the start of this year to 2.7% as the first quarter ended. Royce adds that volatility was a key characteristic of the small-cap sector over the past couple of quarters, with returns swinging from +10% to -10% regularly. Additionally, turbulence in the economy also led investors to flee to the relatively safer mega cap firms such as Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT).

Another report from Janus Henderson is quite optimistic for the fortunes of small-cap companies. Janus outlines that when the price to book value of a firm is used as a proxy to evaluate a stock’s discount, small caps have traded significantly below the average most of the time since 1995. It also shares that small caps actually peaked large caps after the collapse of the infamous dot com bubble until the summer of 2018, with the large caps then taking the edge as they were aided by the mega cap companies. Janus adds that small caps tend to perform poorly in the buildup to a recession. But as a recession takes hold, the small caps are “resilient” and cary the potential to deliver strong results after the downturn is over. Finally, the firm concludes by stressing that portfolio positioning is key to benefiting from the potential of long term outsized financial performance.

This sentiment is also echoed by Chuck Royce, the portfolio manager for Royce Investment Partners, who shared his outlook on the small-cap sector in April 2023 and when asked whether the valuations for small-cap stocks have become attractive, replied:

Yes, the Russell 2000 was still in a bear market at the end of March. It fell -24.7% from its peak on 11/8/21 through 3/31/23, and the average stock in the Russell 2000 was down -35.2% from their respective 52-week highs through the end of March. This has created opportunities for us to add to our highest conviction names as well as the chance to investigate new names in several areas. The troubles for regional banks rippled to hit many value and cyclical stocks hard. But our long-term investment perspective and emphasis on quality allow us to tune out the short-term noise, which is especially important at times like this. Within Financials, for example, we like insurance companies, business development companies, and alternative asset managers. These are long-term investments in companies that are not reliant on the banking system. And we’re also looking closely at select regional banks to see which companies look best positioned to survive the currently difficult conditions for the industry.

With these details in mind, let’s take a look at some best small-cap growth stocks to buy now, out of which the top picks are Akero Therapeutics, Inc. (NASDAQ:AKRO), SomaLogic, Inc. (NASDAQ:SLGC), and Mirion Technologies, Inc. (NYSE:MIR).

Photo by Chris Liverani on Unsplash

Our Methodology

To compile our list of the best small-cap growth stocks, we first listed down all the small-cap stocks in Janus Henderson’s Triton Fund Holdings portfolio. Then, the number of hedge funds that had invested in them during Q4 2022 was determined through Insider Monkey’s survey of 943 funds. Out of the 28 firms identified, the top ten small-cap stocks are listed below.

10 Best Small-Cap Growth Stocks to Buy Now

10. National Vision Holdings, Inc. (NASDAQ:EYE)

Number of Hedge Fund Investors in Q4 2022: 14

National Vision Holdings, Inc. (NASDAQ:EYE) is a specialty retailer based in Duluth, Georgia. As the name suggests, the firm sells optical products.

14 of the 943 hedge funds had bought the firm’s shares during last year’s fourth quarter. National Vision Holdings, Inc. (NASDAQ:EYE)’s largest investor is Henry Ellenbogen’s Durable Capital Partners with a $119 million stake.

Along with SomaLogic, Inc. (NASDAQ:SLGC), Akero Therapeutics, Inc. (NASDAQ:AKRO), and Mirion Technologies, Inc. (NYSE:MIR), National Vision Holdings, Inc. (NASDAQ:EYE) is a top small-cap growth stock.

9. OmniAb, Inc. (NASDAQ:OABI)

Number of Hedge Fund Investors in Q4 2022: 16

OmniAb, Inc. (NASDAQ:OABI) is a biotechnology company headquartered in Emeryville, California. The firm was set up in 2012. It is one of the more interesting biotechnology companies which has a platform to generate antibodies and other substances to aid in drug development. OmniAb, Inc. (NASDAQ:OABI) owns a platform of animal intelligence that uses rats, chickens, and mice to generate antibodies.

After digging through 943 hedge funds for their Q4 2022 portfolios, Insider Monkey discovered that 16 had held a stake in the OmniAb, Inc. (NASDAQ:OABI).

8. SMART Global Holdings, Inc. (NASDAQ:SGH)

Number of Hedge Fund Investors in Q4 2022: 17

SMART Global Holdings, Inc. (NASDAQ:SGH) is a semiconductor firm headquartered in Milpitas, California. The company designs and sells memory modules, provides supply chain services, and computing solutions.

By the end of last year’s fourth quarter, 17 of the 943 hedge funds part of Insider Monkey’s database had held a stake in SMART Global Holdings, Inc. (NASDAQ:SGH). Out of these, the firm’s largest investor is Jonathan Guo’s Yiheng Capital with a $43.9 million stake that comes courtesy of 2.9 million shares.

7. LiveRamp Holdings, Inc. (NYSE:RAMP)

Number of Hedge Fund Investors in Q4 2022: 17

LiveRamp Holdings, Inc. (NYSE:RAMP) is a technology company headquartered in San Francisco, California. The firm provides data management platforms such as identity management, data integration, and data enablement.

Insider Monkey took a look at 943 hedge funds for their investments as of December 2022 and found out that 17 had invested in LiveRamp Holdings, Inc. (NYSE:RAMP). ‘

6. Ligand Pharmaceuticals Incorporated (NASDAQ:LGND)

Number of Hedge Fund Investors in Q4 2022: 17

Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) is a biotechnology company that was set up in 1987 and is headquartered in San Diego, California. The firm develops several different technologies to treat or manage myeloma, osteoporosis, COVID-19, pneumonia, lymphoma, and other diseases. Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) also has partnerships with all kinds of pharmaceutical firms such as Pfizer, Merck, Amgen, and Gilead.

During 2022’s final quarter, 17 of the 943 hedge funds surveyed by Insider Monkey had bought Ligand Pharmaceuticals Incorporated (NASDAQ:LGND)’s shares. Out of these, the firm’s largest investor is Ian Simm’s Impax Asset Management since it owns 234,320 shares that are worth $15 million.

Akero Therapeutics, Inc. (NASDAQ:AKRO), Ligand Pharmaceuticals Incorporated (NASDAQ:LGND), SomaLogic, Inc. (NASDAQ:SLGC), and Mirion Technologies, Inc. (NYSE:MIR) are some great small-cap growth stocks.

Click to continue reading and see 5 Best Small-Cap Growth Stocks to Buy Now.

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Disclosure: None. 10 Best Small-Cap Growth Stocks to Buy Now is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

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As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

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This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

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Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
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You simply won’t find another AI and energy stock this cheap… with this much upside.

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This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

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As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…