11 Cheap Small-Cap Stocks to Buy Before the Next Breakout

Published on August 31, 2023 at 10:12 pm by Ramish Cheema in News, Quantitative Investing

In this piece, we will take a look at 11 cheap small cap stocks to buy before the next breakout. If you want to skip out on an introduction to small cap stocks and the latest events in the stock market, then take a look at 5 Cheap Small-Cap Stocks to Buy Before the Next Breakout.

Different sectors of the stock market react differently to economic indicators and offer different kinds of returns. Large cap stocks such as Apple Inc. (NASDAQ:AAPL) and Meta Platforms, Inc. (NASDAQ:META) are better suited for times of turmoil as their heft and size weather serious downturns in the market. However, consumer defensive stocks such as Walmart Inc. (NYSE:WMT) outpace the mega cap technology stocks in ‘defending’ against share losses. On the flip side, small cap stocks typically fall significantly if the economic outlook is dour. This is because these firms have relatively smaller markets and are not able to hedge effectively against significant drops in consumer spending. Yet, as the condition improves, what goes down can go up, and small caps can lead their mega cap peers when it comes to returns.

Right now, investors in American stocks are watching the Federal Reserve with eagle eyes. While the central bank has signaled that today’s economic climate is quite different from last year, the fact that the U.S. economy has remained resilient and inflation has taken longer than expected to come down has still left some unease among investors. However, the close of August had some good news for investors. This came in the form of job openings, which measure the state of the labor market – one of the Fed’s most crucially watched metrics for its interest rate decisions.

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed that job openings in July dropped by 338,000 to 8.83 million which was significantly lower than what economists polled by multiple news media outlets were expecting. For stocks, this is a bullish indicator since it shows that the job market is slowing down. It indicates that firms are hiring less aggressively than before and can reduce the compensation offered to new employees as well for a domino effect towards reducing inflation. The job openings rate further bolsters this conclusion as it dropped by 0.2% to sit at 5.3% for June.

Additionally, workers are also worried about a slowing economy as resignations also slowed down in July. They stood at 3.5 million in July which marked a 29 month low. Markets, which had dropped earlier this month in a wave of speculative selling improved after the JOLTS report. The S&P500 index was up 1.23% at the time of writing, while the NASDAQ 100, the NASDAQ Composite, and the Dow Jones Industrial Average (DJIA) were up by 1.91%, 1.63%, and 0.68%, respectively.

Reaction in the small cap segment was roughly at par with the other indexes as the Russell 2000 and Russell 3000 stock indexes gained 1.28% and 1.20%, respectively. This 0.8% difference in the gains between the two underscores a crucial benefit of investing in small cap stocks as well. The logic in favor of small cap investing states that the smaller the stock, the more it can gain in percentage terms and the Russell 2000’s gains support this point of view since it is made of the 2000 smallest stocks in the Russell 3000 index.

A cautious turnaround in America’s economic outlook also appears to be influencing the optimism about the prospects of small cap investing. At least that’s what analysts at Bank of America Corporation (NYSE:BAC) believe. In a freshly released report, they have selected some top small cap stocks that can benefit from an economic recovery. The list includes firms from the biotechnology, energy, and industrial sectors, with some of the names being Northern Oil and Gas (NOG), Chord Electronics (NASDAQ:CHRD), Merus N.V. (NASDAQ:MRUS), MagnaChip Semiconductor Corporation (NYSE:MX), and Algoma Steel Group Inc. (NASDAQ:ASTL). In fact, interest in the small cap sector has actually started to pique as of late, with a report from July showing that flows in small cap stocks picking up in July and leading Bank of America to comment that a “potential” for a rally was present due to earlier bearish trends.

This sentiment is echoed by Chuck Royce’s Royce Investment Partners which shared in a recent blog post:

Yet we are optimistic both in spite of the relative disadvantage of small-caps and, in some ways, because of it.

First, significant multiple compression has occurred over the last several months among small caps, particularly small-cap value stocks. The result is that valuations looked highly favorable for the Russell 2000, on both an absolute basis and relative to the Russell 1000, where they remain close to a 20-year low, based on our preferred valuation metric, enterprise value over earnings before interest & taxes (“EV/EBIT”). Unsurprisingly in light of how it has recently lagged growth, the Russell 2000 Value Index finished June much more attractively valued than the Russell 2000 Growth Index, based on that same EV/EBIT metric. It is also worth noting that concerns about elevated valuations in the overall market have played out in an inflationary climate with rising interest rates and widespread anxiety that the economy is about to slip into a recession. We suspect that these concerns will continue to recede as economic news continues to skew more positively. Of course, we are more focused on the absolute valuations of individual companies, which in many instances look appealingly inexpensive to us. The average stock in the Russell 2000 was -28% off its 52-week high at the end of June, which gives some sense of the opportunity set that exists within small cap—and with it, the potential for improved performance going forward. Our expectation is that this potential will be realized over the next few years.

For some of Royce Investment’s stock picks during the first quarter, you can check out Chuck Royce Portfolio, Performance and Net Worth.

With these details in mind, we decided to take a look at some small cap stocks to buy before a potential breakout out of which some top picks are uniQure N.V. (NASDAQ:QURE), Aclaris Therapeutics, Inc. (NASDAQ:ACRS), and AbCellera Biologics Inc. (NASDAQ:ABCL).

Our Methodology

To compile our list of the cheap small cap stocks to buy before a breakout we made a list of firms whose shares trade below $10 and with analyst recommendations of Buy or better. To account for a potential breakout, only those stocks with the highest share price upside based on analyst average price targets were selected. The list was then further refined to account for hedge fund sentiment, as the stocks with the stocks with highest hedge fund number of hedge fund investors during this year’s second quarter were selected for the final collection

11 Cheap Small-Cap Stocks to Buy Before the Next Breakout

11. Repare Therapeutics Inc. (NASDAQ:RPTX)

Number of Hedge Fund Investors In Q2 2023: 14

Latest Share Price: $9.81

Repare Therapeutics Inc. (NASDAQ:RPTX) is a Canadian biotechnology firm that develops cancer treatments using gene editing technologies. The firm’s average analyst share price target sits at $27, for a sizeable upside over the current share price. Its second quarter earnings report saw the company beat analyst EPS estimates, and a proof of concept trial for a tumor treatment also demonstrated favorable results in June.

For the quarter ending in June 2023, 14 out of the 910 hedge funds profiled by Insider Monkey had held a stake in Repare Therapeutics Inc. (NASDAQ:RPTX). Out of these, the firm’s biggest investor is Mark Lampert’s Biotechnology Value Fund / BVF Inc since it owns 8.2 million shares that are worth $87.7 million.

10. Aadi Bioscience, Inc. (NASDAQ:AADI)

Number of Hedge Fund Investors In Q2 2023: 14

Latest Share Price: $6.76

Aadi Bioscience, Inc. (NASDAQ:AADI) is another biotechnology company developing cancer treatments. The stock is rated Strong Buy on average and the average share price target is $35. Aadi Bioscience, Inc. (NASDAQ:AADI)’s second quarter results saw it report $6.2 million in revenue for a substantial growth over the year ago quarter’s $3.4 million.

During this year’s second quarter, 14 out of the 910 hedge funds researched by Insider Monkey had invested in Aadi Bioscience, Inc. (NASDAQ:AADI). Along with uniQure N.V. (NASDAQ:QURE), Aclaris Therapeutics, Inc. (NASDAQ:ACRS), and AbCellera Biologics Inc. (NASDAQ:ABCL) it is a small cap stock that might be worth buying before the next breakout.

9. The Joint Corp. (NASDAQ:JYNT)

Number of Hedge Fund Investors In Q2 2023: 16

Latest Share Price: $9.61

The Joint Corp. (NASDAQ:JYNT) is a chiropractic services provider with hundreds of clinics all over America. Its average analyst share price target is $31. However, the shares dipped in August after the firm delayed the filing of its second quarter results despite marking strong revenue growth.

Insider Monkey’s June quarter of 2023 survey of 910 hedge funds revealed 16 The Joint Corp. (NASDAQ:JYNT) investors. The firm’s largest hedge fund shareholder is Gregory Bylinsky and Jefferson Gramm’s Bandera Partners due to its $35.7 million stake.

8. Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT)

Number of Hedge Fund Investors In Q2 2023: 17

Latest Share Price: $8.89

Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) is a biotechnology firm that develops treatments for skin diseases. It’s another stock that is rated Strong Buy on average and the average share price target is a whopping $41.88.

Insider Monkey’s Q2 2023 research of 910 hedge fund holdings outlined that 17 had bought a stake in the company. Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT)’s biggest stakeholder is David Rosen’s Rubric Capital Management since it owns $46 million worth of shares.

7. Nurix Therapeutics, Inc. (NASDAQ:NRIX)

Number of Hedge Fund Investors In Q2 2023: 18

Latest Share Price: $8.59

Nurix Therapeutics, Inc. (NASDAQ:NRIX) is an American firm making treatments for lymphoma, tumors, and other cancers. Despite a worrying cash burn rate, the firm’s revenue is actually growing, with the second quarter results showing $30.7 million in net sales which more than doubled over the year ago quarter’s $11 million.

After scouring through 910 hedge funds for their second quarter of 2023 shareholdings, Insider Monkey discovered that 18 had invested in Nurix Therapeutics, Inc. (NASDAQ:NRIX). Julian Baker and Felix Baker’s Baker Bros. Advisors is the company’s largest stakeholder, owning 3.8 million shares that are worth $38.7 million.

6. Edgewise Therapeutics, Inc. (NASDAQ:EWTX)

Number of Hedge Fund Investors In Q2 2023: 19

Latest Share Price: $7.00

Edgewise Therapeutics, Inc. (NASDAQ:EWTX) focuses its efforts on developing treatments for diseases of the heart and the muscular system. While the shares currently trade for $7, analysts have penned in a massive upside through an average share price target of $27.

19 out of the 910 hedge funds part of Insider Monkey’s Q2 2023 database have bought the firm’s shares. Edgewise Therapeutics, Inc. (NASDAQ:EWTX)’s biggest investor is Samuel Isaly’s OrbiMed Advisors since it owns a stake worth $112 million.

uniQure N.V. (NASDAQ:QURE), Edgewise Therapeutics, Inc. (NASDAQ:EWTX), Aclaris Therapeutics, Inc. (NASDAQ:ACRS), and AbCellera Biologics Inc. (NASDAQ:ABCL) are some cheap small cap stocks with positive indicators.

Click to continue reading and see 5 Cheap Small-Cap Stocks to Buy Before the Next Breakout.

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

Published on June 23, 2025 at by Inan Dogan, PhD

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.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

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.

And infrastructure needs a builder with experience, scale, and execution.

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.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

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
The onshoring boom driven by Trump-era tariffs
A surge in U.S. LNG exports
And a unique footprint in nuclear energy—the future of clean, reliable power

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

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

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.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

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.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 100+% Return within 12 to 24 months.

We’re now offering month-to-month subscriptions with no commitments.

For a ridiculously low price of just $9.99 per month, you can unlock our in-depth investment research and exclusive insights – that’s less than a single fast food meal!

Here’s why this is a deal you can’t afford to pass up:

Access to our Detailed Report on our AI, Tariffs, and Nuclear Energy Stock with 100+% potential upside within 12 to 24 months
BONUS REPORT on our #1 AI-Robotics Stock with 10000% upside potential: Our in-depth report dives deep into our #1 AI/robotics stock’s groundbreaking technology and massive growth potential.
One New Issue of Our Premium Readership Newsletter: You will also receive one new issue per month and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.
One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149
Bonus Content: Premium access to members-only fund manager video interviews
Ad-Free Browsing: Enjoy a month of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.
Lifetime Price Guarantee: Your renewal rate will always remain the same as long as your subscription is active.
30-Day Money-Back Guarantee: If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99.

2. Enjoy a month of ad-free browsing, exclusive access to our in-depth report on the Trump tariff and nuclear energy company as well as the revolutionary AI-robotics company, and the upcoming issues of our Premium Readership Newsletter.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

Subscribe Now!

No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a month later!

Insider Monkey Ads

A New Dawn is Coming to U.S. Stocks

Published on June 13, 2025 at by Insider Monkey Staff

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…

Insider Monkey Ads

Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Log In

Sign Up

11 Cheap Small-Cap Stocks to Buy Before the Next Breakout

Published on August 31, 2023 at 10:12 pm by Ramish Cheema in News, Quantitative Investing

11 Cheap Small-Cap Stocks to Buy Before the Next Breakout

11. Repare Therapeutics Inc. (NASDAQ:RPTX)

10. Aadi Bioscience, Inc. (NASDAQ:AADI)

9. The Joint Corp. (NASDAQ:JYNT)

8. Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT)

7. Nurix Therapeutics, Inc. (NASDAQ:NRIX)

6. Edgewise Therapeutics, Inc. (NASDAQ:EWTX)

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

Published on June 23, 2025 at by Inan Dogan, PhD

Here’s why this is a deal you can’t afford to pass up:

A New Dawn is Coming to U.S. Stocks

Published on June 13, 2025 at by Insider Monkey Staff