In this article, we discuss the 5 best small-cap stocks to buy according to hedge funds. If you want to read our analysis of small-cap investing, go directly to the 10 Best Small-Cap Stocks to Buy According to Hedge Funds.
5. Clear Channel Outdoor Holdings, Inc. (NYSE: CCO)
Market Cap: $1.17 billion
Number of Hedge Fund Holders: 29
Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) is an American outdoor advertising company. It helps advertisers to create inspiring campaigns using traditional and digital displays. The company has over 450,000 displays in 31 countries. Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) has operations in 44 of the top 50 markets in the U.S.
In Q2 2021, Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) reported revenue of $531 million, up 68.6% from the prior-year quarter. America remained the biggest market for the company, accounting for $271.6 million of the gross revenue. Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) also reported 73.8% year-over-year growth in digital earnings.
In July, Morgan Stanley raised its price target on Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) to $3.15, with an ‘Equal Weight’ rating on the shares. In the past 12 months, Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) has delivered a 130.5% return to shareholders.
As of Q1 2021, 29 hedge funds tracked by Insider Monkey have positions in Clear Channel Outdoor Holdings, Inc. (NYSE: CCO), worth $193.9 million.
4. Aclaris Therapeutics, Inc. (NASDAQ: ACRS)
Market Cap: $897 million
Number of Hedge Fund Holders: 30
Aclaris Therapeutics, Inc. (NASDAQ: ACRS) is a biopharmaceutical company. The company develops molecule therapies that help patients with immune-inflammatory conditions. Aclaris Therapeutics, Inc. (NASDAQ: ACRS) was founded in 2012 and is headquartered in Pennsylvania, U.S.
In 2020, Aclaris Therapeutics, Inc. (NASDAQ: ACRS) generated revenue of $6.4 million, up from $4.2 million in 2019. In the second quarter of 2021, the company beat revenue by $0.07 million at $1.82 million. Aclaris Therapeutics, Inc. (NASDAQ: ACRS) reported a $1.4 million growth in research and development due to the company’s investment in the development of clinical-stage drugs. In July, Jefferies initiated its coverage on Aclaris Therapeutics, Inc. (NASDAQ: ACRS) with a ‘Buy’ rating and a price target of $32. Since the beginning of the year, Aclaris Therapeutics, Inc. (NASDAQ: ACRS) has delivered a return of 125.8%.
As of Q1 2021, 30 hedge funds tracked by Insider Monkey have positions in Aclaris Therapeutics, Inc. (NASDAQ: ACRS), up from 23 in the previous quarter. The total value of these stakes is over $655 million.
3. Bloomin’ Brands, Inc. (NASDAQ: BLMN)
Market Cap: $2.31 billion
Number of Hedge Fund Holders: 32
Bloomin’ Brands, Inc. (NASDAQ: BLMN) is an American restaurant holding company, with headquarters in Florida, U.S. The company owns and operates over 1,400 restaurants in 47 states. Some of the famous casual dining chains owned by Bloomin’ Brands, Inc. (NASDAQ: BLMN) include Outback Steakhouse and Carrabba’s Italian Grill.
In Q2 2021, Bloomin’ Brands, Inc. (NASDAQ: BLMN) reported an EPS of $0.81, beating the consensus by $0.08. The consolidated revenue for the quarter stood at $1.08 billion, presenting an 86.7% year-over-year growth. Moreover, Bloomin’ Brands, Inc. (NASDAQ: BLMN) also reported a 65.8% growth in comparable restaurant sales. Recently, Credit Suisse upgraded Bloomin’ Brands, Inc. (NASDAQ: BLMN) to ‘Outperform’ with a $33 price target. The firm appreciated the company’s in-restaurant sales growth.
As of Q1 2021, 32 hedge funds have positions in Bloomin’ Brands, Inc. (NASDAQ: BLMN), worth $498.2 million. The number is up from 24 funds in the previous quarter.
2. Turning Point Brands, Inc. (NYSE: TPB)
Market Cap: $925.3 million
Number of Hedge Fund Holders: 33
Turning Point Brands, Inc. (NYSE: TPB) is an American tobacco company founded in 2004. The company manufactures, markets, and distributes smoking accessories and consumables through its brands Zig-Zag and Stoker’s. The products of Turning Point Brands, Inc. (NYSE: TPB) are available at over 210,000 retail stores in America.
Turning Point Brands, Inc. (NYSE: TPB) reported stronger earnings in Q2 2021. The company reported a net income of $15.4 million, up 49.2% from the prior-year quarter. The EPS stood at $0.84, beating the market estimate by $0.19. Turning Point Brands, Inc. (NYSE: TPB) generated revenue of $122.6, presenting 16.8% year-over-year growth. For FY21, the company expects net sales in between $447 million to $462 million. In July, the company’s earnings were lauded by B. Riley as the firm lifted its price target on Turning Point Brands, Inc. (NYSE: TPB) to $65, with a ‘Buy’ rating on the shares. Turning Point Brands, Inc. (NYSE: TPB) gained 63.1% in the past year.
Hedge funds are investing in Turning Point Brands, Inc. (NYSE: TPB), as in Q1 2021, 33 funds have positions in the company, compared with 27 in the previous quarter.
Maran Capital Management recently published its second-quarter 2021 investor letter and mentioned Turning Point Brands, Inc. (NYSE: TPB) in it. Here is what the firm has to say:
“We continue to hold core positions in previously disclosed companies (including) Turning Point Brands (TPB). Turning Point Brands remains cheap given its organic growth profile, low capital intensity, and large collection of small, asymmetric bets in vaping and active ingredients. TPB’s Zig Zag brand is among the most well-positioned brands in the US as cannabis legalization marches forward, jurisdiction by jurisdiction.”
1. Hostess Brands, Inc. (NASDAQ: TWNK)
Market Cap: $2.01 billion
Number of Hedge Fund Holders: 34
Hostess Brands, Inc. (NASDAQ: TWNK) is a leading American packaged food company. It mainly manufactures, sells, and markets snacks and bakery products in North America. Hostess Brands, Inc. (NASDAQ: TWNK) owns some of the most famous bakeries in the U.S., namely Voortman Cookies, Superior Cake Products, Inc., etc.
In Q2 2021, Hostess Brands, Inc. (NASDAQ: TWNK) reported a net income of $32.2 million, up 10.3% from the prior-year quarter. The EPS of $0.23 beat the market consensus by $0.01. Net revenue also increased by 13.5% year-over-year at $291.5 million. For FY21, Hostess Brands, Inc. (NASDAQ: TWNK) expects revenue growth between 7.5%-9.0%.
In May, Stephens initiated its coverage on Hostess Brands, Inc. (NASDAQ: TWNK) with an ‘Overweight’ rating and an $18 price target. In the past year, Hostess Brands, Inc. (NASDAQ: TWNK) has delivered a return of 23.5%.
As of Q1 2021, 34 hedge funds tracked by Insider Monkey have positions in Hostess Brands, Inc. (NASDAQ: TWNK), up from 26 in the previous quarter. The total value of these stakes is $338.2 million. Segantii Capital is the company’s leading shareholder with 1.2 million shares, worth $19.4 million.
You can also take a look at 15 Best Small-Cap Healthcare Stocks to Buy and 10 Best Small Cap Stocks to Buy in 2021
