In this article, we will look at the top 5 small-cap stocks with highest upside potential. If you want to explore similar stocks that have the potential to gain more market share in the near future, you can also take a look at Top 10 Small-Cap Stocks With Highest Upside Potential.
5. IonQ Inc. (NYSE:IONQ)
Number of Hedge Fund Holders: 19
IonQ Inc. (NYSE:IONQ) is an emerging American quantum computing hardware and software company, involved in the development of general-purpose quantum computing systems. This January, the company announced a strategic collaboration with Hyundai Motor Company to develop quantum solutions for studying lithium compounds and their associated chemical reactions in battery chemistry. The companies aim to develop next-generation lithium batteries with enhanced durability, capacity, and safety. IonQ Inc. (NYSE:IONQ) poses a significant upside to benefit from the EV revolution and is therefore ranked among the top 10 small-cap stocks with the highest upside potential.
This May, Benchmark analyst David Williams trimmed his price target on IonQ Inc. (NYSE:IONQ) to $15 from $20 but reiterated a Buy rating on the shares following the company’s strong quarterly report. Williams added that quantum computing is in its early development stage but believes IonQ Inc. (NYSE:IONQ) to be an industry leader in the space and notes the recent share pullback as an attractive entry point for investors.
Hedge funds are becoming bullish on IonQ Inc. (NYSE:IONQ). Insider Monkey found 19 hedge funds having stakes in the company at the close of Q4 2021. The total value of these stakes came in at $184.23 million.
4. PDC Energy, Inc. (NASDAQ:PDCE)
Number of Hedge Fund Holders: 24
PDC Energy, Inc. (NASDAQ:PDCE) operates as an independent exploration and production company that explores and develops crude oil, natural gas, and natural gas liquids in the United States. This April, PDC Energy, Inc. (NASDAQ:PDCE) announced that it expects to generate $1.3 billion in after-tax free cash flows with over $800 million of total investor returns in 2022. The company plans on investing up to $1 billion to increase its production to between 225,000 and 240,000 BOE per day and 74,000 to 81,000 BBLs of oil per day.
On May 4, PDC Energy, Inc. (NASDAQ:PDCE) released its financial statement for the fiscal first quarter of 2022 in which the company outperformed EPS consensus by $0.61. According to the company’s report, PDC Energy, Inc. (NASDAQ:PDCE) registered an EPS of $3.66 and generated revenues of 316.45 million, up 10.63% year over year from $286.04 million. As of May 18, the stock has surged by 56.79% over the past twelve months and has a forward price to earnings ratio of 3.73.
PDC Energy, Inc. (NASDAQ:PDCE) is becoming a popular stock on Wall Street. On April 21, Truist analyst Neal Dingmann raised his price target on PDC Energy, Inc. (NASDAQ:PDCE) to $96 from $80 and maintained a Buy rating on the shares. At the end of Q4 2021, Insider Monkey found 24 hedge funds bullish on PDC Energy, Inc. (NASDAQ:PDCE) with stakes worth $265.95 million. This is compared to 20 positions in the preceding quarter with stakes worth $189.02 million.
As of the end of this March, Harris Associates is the most bullish fund on PDC Energy, Inc. (NASDAQ:PDCE) owning over 2.17 million shares of the company. The investment covers 0.2% of Harris Associates’ 13F portfolio.
3. Sunnova Energy International Inc. (NYSE:NOVA)
Number of Hedge Fund Holders: 25
Sunnova Energy International Inc. (NYSE:NOVA) is a leading provider of residential energy services in the United States. The company offers maintenance, monitoring, repairs, and diagnostics services. On April 27, Sunnova Energy International Inc. (NYSE:NOVA) reported earnings for the fiscal first quarter of 2022. The company reported a loss per share of $0.33 but beat estimates by $0.01. Moreover, the company’s quarterly revenues grew by 59.23% year over year and came in at $65.72 million, up from $41.28 million in the comparable quarter last year. Sunnova Energy International Inc. (NYSE:NOVA) also reaffirmed its fiscal year 2022 EBITDA view of $117 million to $137 million and added that the company sees additional customer subscriptions of up to 89,000 by the end of the year.
On May 18, Northland analyst Abhishek Sinha initiated coverage of Sunnova Energy International Inc. (NYSE:NOVA) with an Outperform rating and a $30 price target. The analyst noted that he sees now as an attractive entry point for investors to stack up on Sunnova Energy International Inc. (NYSE:NOVA) to gain exposure in the residential solar market given the company’s strong business model and robust cash flows. Sinha further contended that solar stocks suffered major blows from rising rates and uncertainties over government policies, but sees significant upside for Sunnova Energy International Inc. (NYSE:NOVA) as demand for residential solar systems surges.
By the end of the fourth quarter of 2021, 25 hedge funds were long Sunnova Energy International Inc. (NYSE:NOVA). The total stakes of these hedge funds were valued at $149.91 million. Ken Griffin’s Citadel Investment Group raised its Q4 2021 stakes by an astounding 1,342%, bringing its Q1 2022 stakes to $31.26 million as of March 31, 2022. Citadel Investment Group is the leading shareholder in the company.
ClearBridge Investments mentioned Sunnova Energy International Inc. (NYSE:NOVA) in its “Small Cap Strategy” first-quarter 2022 investor letter. Here is what the firm said:
“We initiated a new position in Sunnova (NYSE:NOVA), in the energy sector. Sunnova is a residential solar and energy storage company that enables adoption through a network of installers with options for financing, service and broader home energy management. Rising interest rates and solar energy supply constraints weighed on the stock’s performance in the fourth quarter of 2021 but created a compelling valuation opportunity to buy this business when the market was embedding low growth expectations. We believe Sunnova will deliver value accretive growth for a much longer time, with its downside limited by the long-term, fixed-rate, high- quality contracts it has with customers.”
2. Northern Oil & Gas, Inc. (NYSE:NOG)
Number of Hedge Fund Holders: 26
Northern Oil and Gas, Inc. (NYSE:NOG) is an independent energy company that engages in the acquisition, exploration, development, and production of crude oil and natural gas properties in the United States. Northern Oil and Gas, Inc. (NYSE:NOG) is strengthening its position in the oil and gas market and is making efforts to gain more market share, making it one of the top small-cap stocks with high upside potential.
This May, Northern Oil and Gas, Inc. (NYSE:NOG) reported its fiscal first-quarter 2022 performance. The company registered an EPS of $1.58 and beat estimates by $0.33. The company reported revenues of $456.46 million, up an astounding 190.13% year over year, and exceeded market consensus by $116.80 million. Northern Oil and Gas, Inc. (NYSE:NOG) reported Q1 production of 71,255 barrels of oil equivalent (BOE) per day, up 85% from the comparable quarter last year. On top of this, the company raised its fiscal year 2022 annual production guidance to 71,000-76,000 BOE per day from 70,000-75,000 BOE per day.
Northern Oil and Gas, Inc. (NYSE:NOG) is attracting multiple “Buy” ratings from expert financial analysts. On April 26, Citi analyst Scott Gruber raised his price target on Northern Oil and Gas, Inc. (NYSE:NOG) to $36 from $31 and maintained a Buy rating on the shares.
Hedge funds are piling into Northern Oil and Gas, Inc. (NYSE:NOG) and as of the fourth quarter of 2021, 26 hedge funds were long Northern Oil and Gas, Inc. (NYSE:NOG) with stakes worth $241.07 million. As of May 18, Northern Oil and Gas, Inc. (NYSE:NOG) has returned 59.14% to investors over the past twelve months.
Angelo Gordon & Co is the most prominent shareholder in Northern Oil and Gas, Inc. (NYSE:NOG) as of March 31, 2022. The fund’s stakes are valued at $49.96 million, which accounts for 5.61% of its 13F portfolio.
1. Global Blood Therapeutics, Inc. (NASDAQ:GBT)
Number of Hedge Fund Holders: 30
Global Blood Therapeutics, Inc. (NASDAQ:GBT) operates as a biopharmaceutical company and is involved in the discovery, development, and delivery of therapeutics that battle sickle cell disease (SCD). On May 4, the company posted earnings for the fiscal first quarter of 2022 in which it exceeded EPS estimates by $0.10. The company reported a loss per share of $1.26 and generated quarterly revenues of $55.16 million, up 41.28% year over year from $39.04 million.
Global Blood Therapeutics, Inc. (NASDAQ:GBT) is gaining prominence in the healthcare industry and winning FDA approvals for its therapeutics. This February, the company’s SCD medication Oxbryta was approved by the European Commission for the treatment of patients that are at least 12 years and above. Oxbryta is FDA approved in the U.S. for use in children at least 4 years of age.
On May 11, Wedbush analysts Andreas Argyrides and Liana Moussatos added Global Blood Therapeutics, Inc. (NASDAQ:GBT) to Wedbush’s Best Ideas List. Argyrides and Moussatos added that the company reported 1,200 additional prescriptions for Oxbryta in Q1, and see this number only increasing in the following quarters. The analysts are bullish on big pharma and see Global Blood Therapeutics, Inc. (NASDAQ:GBT) gaining more market share in the quarters to come, which makes Global Blood Therapeutics, Inc. (NASDAQ:GBT) one of the top small-cap stocks with the highest upside potential. Argyrides and Moussatos reiterated their Outperform rating and $73 price target on the stock.
Global Blood Therapeutics, Inc. (NASDAQ:GBT) is a popular pick among elite hedge funds. Insider Monkey found 30 hedge funds that held stakes in the company at the close of Q4 2021. The total value of these stakes came in at $499.21 million, up from $382.92 million in the prior quarter with 23 positions. The hedge fund sentiment for the stock is positive.
As of March 31, 2022, Perceptive Advisors is the dominating shareholder in Global Blood Therapeutics, Inc. (NASDAQ:GBT) owning over 3.89 million shares of the company. This equates to a stake value of $134.83 million and covers 2.7% of Perceptive Advisors’ 13F portfolio.
You can also take a look at 10 Best Small-Cap Stocks To Buy Now and 15 Best Small-Cap Healthcare Stocks to Buy.
