Small-cap stocks are considered riskier than large-caps, or even mid-caps. Of course, this means they have greater potential for making profits for investors.

That doesn’t mean you should buy risky stocks randomly. Some due diligence will help you find winners that can overcome the risks to move higher and provide you with good returns. (See also: An Introduction To Small Cap Stocks.)

We have selected four top small-cap stocks that are already winners and look like they could have a good possibility for more growth. Let’s look at these four stocks more closely to see what is driving their stock prices. All figures are current as of August 9, 2017.

1. Lithia Motors Inc. (LAD)

This company is an automobile retailer. It earns its living selling new and used cars, as well as warranties, parts, insurance and maintenance services. The three divisions of imports, luxury cars, and domestic vehicles are comprised of more than 30 brands of automobiles.

The stock is trying to leave the small-cap category as it moves upward, giving the company a market capitalization of 2.62 billion. After a drop in February through April, the stock has started climbing again, based on a high-volume breakout.

  • Avg. Volume: 284,560
  • Market Cap: $2.62 billion
  • PE Ratio (TTM): 12.77
  • EPS (TTM): 8.19
  • Dividend & Yield: 1.08 (1.05%)

2. The Brink's Company (BCO)

This is the famous armored car company. Apparently, transferring cash has been earning cash for Brinks. Income has been climbing for the past four quarters.

Of course, the company performs much more high-tech tasks than merely driving sacks of money around. It provides “intelligent” safes, offers cash management services, processes bill payments and designs security systems.

The chart shows that BCO had a high-volume breakout in early February 2017, and followed through with several more up days. It has climbed since then. This is a confirmed uptrend that is part of an already-existing uptrend that began in July 2016.

Investors would be wise to buy on low-volume pullbacks which are nearly inevitable.

  • Avg. Volume: 421,533
  • Market Cap: $3.87 billion
  • PE Ratio (TTM): 54.26
  • EPS (TTM): 1.41
  • Dividend & Yield: 0.60 (0.80%)

3. Spectrum Pharmaceuticals Inc. (SPPI)

Spectrum is a biotech company, so there is added risk here. Biotechs can soar or sink based on a single product. Spectrum Pharmaceuticals has six products, none of which you may have heard of, because they are for the treatment of cancer and some exotic diseases. The company has some significant licensing agreements, and collaborates with other drug companies.

This small-cap stock had a high-volume breakout in November 2016, and after moving sideways for a while, it moved sharply higher.

Though it gave back some of those gains, its 50-day moving average crossed above its 200-day moving average. This is called a “golden cross,” and is considered bullish by investors. The stock has risen again.

  • Avg. Volume: 715,769
  • Market Cap: $721.38 million
  • PE Ratio (TTM): -8.41
  • EPS (TTM): -1.08
  • Dividend & Yield: 0.00 (0.00%)

4. Axcelis Technologies Inc. (ACLS)

This is a semiconductor company that sells equipment to manufacturers of semiconductor chips.

The stock dropped precipitously in November 2016, but recovered immediately and has marched higher. Up volume has been dominating over down volume, indicating that buyers like this stock more than sellers dislike it.

Axcelis has a product called Purion which is finding great demand, and the company projects 2017 revenue to grow 19% over last year.

  • Avg. Volume: 503,684
  • Market Cap: $627.5 million
  • PE Ratio (TTM): 35.04
  • EPS (TTM): 0.6
  • Dividend & Yield: N/A (N/A)

The Bottom Line

Too often, investors see a stock with a long winning streak and assume they missed the time to get in. However, buying small-caps that are trending upwards can be a winning strategy.

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