In this article, we discuss 5 best-performing small-cap stocks of 2022. If you want to see more stocks in this selection, check out 10 Best-Performing Small-Cap Stocks of 2022.
5. NextDecade Corporation (NASDAQ:NEXT)
Number of Hedge Fund Holders: 8
YTD Share Price Gain as of October 3: 118.17%
NextDecade Corporation (NASDAQ:NEXT) is a Texas-based company engaged in the liquefaction and sale of liquefied natural gas, as well as capture and storage of carbon dioxide emissions. On September 15, NextDecade Corporation (NASDAQ:NEXT) announced that it will sell $85 million of its common stock to 10 institutional investors. Each share was priced at $5.50 per share and the company will use the proceeds to continue development activity on the first three trains at its Rio Grande LNG project. The private placement was closed on September 19, 2022.
Stifel analyst Benjamin Nolan on July 28 upgraded NextDecade Corporation (NASDAQ:NEXT) to Hold from Sell with a price target of $6, up from $4.50, after the company announced a new 1 million ton contract with Exxon Mobil Corporation (NYSE:XOM), which marks the fifth new long-term sale and purchase agreement signed in 2022.
Among the hedge funds tracked by Insider Monkey, NextDecade Corporation (NASDAQ:NEXT) was part of 8 hedge fund portfolios at the end of Q2 2022, compared to 14 funds in the last quarter. James Dinan’s York Capital Management is the largest stakeholder of the company, with 57.3 million shares worth $254.5 million.
4. Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM)
Number of Hedge Fund Holders: 16
YTD Share Price Gain as of October 3: 121.37%
Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) was founded in 2008 and is headquartered in Boston, Massachusetts. It is a commercial-stage biopharmaceutical company focused on the development and commercialization of therapeutics for rare genetic diseases of obesity. Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) offered a public offering of 4.8 million units of its common stock priced at $26.00 per share. The offering closed on September 19, 2022. As of October 3, the stock has gained more than 121% year-to-date, which makes it one of the best-performing small-caps of 2022.
On August 7, Goldman Sachs analyst Corinne Jenkins upgraded Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) to Buy from Neutral with a $28 price target, citing a high probability of clinical success in its Hypothalamic Obesity trial.
According to Insider Monkey’s data, 16 hedge funds were long Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) at the end of the second quarter of 2022, compared to 14 funds in the last quarter. Peter Kolchinsky’s RA Capital Management is the largest stakeholder of the company, with 4.8 million shares worth $20.2 million.
3. International Seaways, Inc. (NYSE:INSW)
Number of Hedge Fund Holders: 19
YTD Share Price Gain as of October 3: 130.97%
International Seaways, Inc. (NYSE:INSW) is a New York-based company that owns and operates a fleet of vessels for the transportation of crude oil and petroleum products in the international flag trade. On September 12, International Seaways, Inc. (NYSE:INSW) declared a $0.12 per share quarterly dividend, in line with previous. The dividend was distributed to shareholders on September 28. International Seaways, Inc. (NYSE:INSW) is one of the best-performing small-cap stocks of 2022.
On July 27, BTIG analyst Gregory Lewis upgraded International Seaways, Inc. (NYSE:INSW) to Buy from Neutral with a $30 price target. The combination of consistent increases in global oil production, robust global oil demand, and moderating fleet growth over the next few years indicates increasing crude tanker rates in the medium term, the analyst told investors. The analyst believes the “worst is in the rearview mirror for crude tankers” and expects a “gradual melt up in rates into 2023.” He saw 30% upside in International Seaways, Inc. (NYSE:INSW) stock.
According to Insider Monkey’s Q2 data, 19 hedge funds were bullish on International Seaways, Inc. (NYSE:INSW), up from 17 funds in the preceding quarter. Stephen C. Freidheim’s Cyrus Capital Partners is the biggest stakeholder of the company, with 1.76 million shares worth $37.3 million.
Here is how ClearBridge Investments mentioned International Seaways, Inc. (NYSE:INSW) in the Q2 2022 investor letter:
“The Strategy also benefited from our holding in International Seaways, Inc. (NYSE:INSW), in the energy sector, which owns and operates a fleet of oceangoing vessels for the transportation of crude oil and petroleum products. The company benefited during the quarter as a result of tightness in the oil market, particularly in Europe, as low global inventories and high demand have spurred greater need for transportation between states that are net energy producers with those that are net energy consumers.
Additionally, economic sanctions placed on Russia and its companies have reduced the global number of oil and petroleum transportation ships, resulting in greater demand for International Seaways’s services and allowing it to increase its shipping rates, to the benefit of its bottom line. We continue to view the company as a strong value play, as decades of underinvestment in maritime shipping has resulted in many ships approaching a forced retirement date with no obvious replacements.
As the number of available ships declines, particularly specialized ships such as International Seaways’s energy transports, it should help to bolster the company’s pricing and negotiation power with its customers. We believe the company’s shares are currently trading at substantially below the current book value of the company’s assets, and as a result we continue to have high conviction in International Seaways as a long-term value creation opportunity.”
2. Belite Bio, Inc (NASDAQ:BLTE)
Number of Hedge Fund Holders: 1
YTD Share Price Gain as of October 3: 183.29%
Belite Bio, Inc (NASDAQ:BLTE) is a California-based clinical-stage biopharmaceutical drug development company, specializing in the research and development of novel therapeutics for atrophic age-related macular degeneration and autosomal recessive stargardt diseases. The stock has climbed over 183% year-to-date as of October 3, making it one of the best-performing small-cap names of 2022.
H.C. Wainwright analyst Yi Chen on August 1 initiated coverage of Belite Bio, Inc (NASDAQ:BLTE) with a Buy rating and a $58 price target, noting that the company has a unique approach for a rare juvenile-onset retinal disorder.
1. Target Hospitality Corp. (NASDAQ:TH)
Number of Hedge Fund Holders: 14
YTD Share Price Gain as of October 3: 248.54%
Target Hospitality Corp. (NASDAQ:TH) stock has gained 248.5% year-to-date as of October 3, which merits its inclusion on our list of the best-performing small-cap stocks of 2022. Target Hospitality Corp. (NASDAQ:TH) is a Texas-based specialty rental and hospitality services company. The company serves the U.S. government, government contractors, investment grade natural resource development companies, and energy infrastructure companies.
On July 12, Oppenheimer analyst Scott Schneeberger raised the price target on Target Hospitality Corp. (NASDAQ:TH) to $18 from $9 and maintained an Outperform rating on the shares after updating the model for Target Hospitality Corp. (NASDAQ:TH)’s recently announced contract extension of its West Texas government facility.
According to the second quarter database of Insider Monkey, 14 hedge funds held stakes worth $47.8 million in Target Hospitality Corp. (NASDAQ:TH), compared to 13 funds in the prior quarter worth $46.7 million. Gregg J. Powers’ Private Capital Management is the leading stakeholder of the company, with 5.8 million shares valued at $33.5 million.
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