Chicago, IL – July 22, 2024 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2305460/5-top-small-cap-stocks-to-buy-now)
5 Top Small-Cap Stocks to Buy Now
Welcome to Episode #409 of the Zacks Market Edge Podcast.
(0:30) - Should You Be Adding More Small Cap Stocks To Your Portfolio?
(5:20) - Stock Screener Run Down: How To Find The Best Investments For You
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey is going solo to screen for the top small cap stocks. The small caps have underperformed the large caps for years. With everyone buying the Mag 7 stocks, the disconnect between the large caps and the smalls became even more pronounced in the last year.
Until July 2024 when the small cap stocks suddenly staged a big 10% rally.
Could this be a real turnaround?
Should you be adding small caps to your portfolio?
Screening for Top Small Caps
Tracey decided to run one of Zacks Premium screens for this podcast. It looks for Zacks Rank #1 (Strong Buy) small cap stocks.
Originally the screen looked for stocks under $1 billion but that returned just 8 stocks. Tracey adjusted the market cap to $2 billion and as many investors still consider up to $2 billion to be "small."
That screen returned 23 small cap stocks that were Zacks Rank #1 (Strong Buys), the highest Zacks recommendation, which also had earnings growth.
5 Top Small Cap Stocks to Buy Now
1. Soundhound AI, Inc. SOUN
Soundhound AI is a Voice AI and speech recognition company founded in 2005. It has a market cap of $1.6 billion. At the time of the podcast, Soundhound was a Zacks Rank #1 (Strong Buy) but has fallen to a #2 (Buy) stock.
Shares of Soundhound have rallied big in 2024, adding 135%. Earnings are expected to rise 13.2% in 2024.
Should Soundhound AI be on your small cap short list?
2. Afya Ltd. AFYA
Afya Ltd is the largest hub of education and solutions for medical practice in Brazil. It services 334,000 physicians and medical students. Afya has a market cap of $1.6 billion.
Shares of Afya have fallen 19.1% year-to-date. But earnings are expected to rise 27.3% in 2024.
Should Afya be on your small cap short list?
3. Castle Biosciences, Inc. CSTL
Castle Biosciences is a molecular diagnostics company for dermatologic cancers. It has a market cap of $523 million. Castle Biosciences was a Zacks Rank #1 (Strong Buy) at the time of the podcast but has fallen to a Zacks Rank #2 (Buy) stock now.
Shares of Castle Biosciences are down 12.2% year-to-date. Earnings are expected to rise 20.6% in 2024.
Should Castle Biosciences be on your small cap short list?
4. TriMas Corp. TRS
TriMas Corp. manufactures a diverse set of products mostly for consumer products, aerospace and defense, and industrial end markets. It has a market cap of $1.1 billion. TriMas was a Zacks Rank #1 (Strong Buy) at the time of the podcast but has dropped to a #2 (Buy) stock.
Shares of TriMas have gained 6.1% year-to-date. Earnings are expected to be up 16.7% in 2024.
Should TriMas be on your small cap short list?
5. Immersion Corp. IMMR
Immersion Corp. makes touch feedback technology that is used in over 3 billion devices worldwide. It has a market cap of $389 million.
Shares of Immersion have soared 73% year-to-date. Earnings are expected to rise 48% in 2024.
Should Immersion be on your small cap short list?
What else do you need to know about screening for top small cap stocks?
Tune into this week's video podcast to find out.
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