Small cap stocks are listed companies that have market capitalizations typically ranging from $300 million to $2 billion. Since the share prices of these companies can have big fluctuations over a short period of time, companies with market caps of up to $10 billion are also found in the small cap universe. Some of the stocks classified as small cap include casual-wear retailer Abercrombie & Fitch Co. (ANF), cloud computing business Fastly Inc. (FSLY), and global transportation company CAI International Inc. (CAI). Small cap stocks, as represented by the Russell 2000 Index (RUT), have underperformed the broader market over the past 12 months. They've posted a total return of -3.7% compared to the S&P 500's total return of 9.9%. These market performance numbers and the statistics in the tables below are as of May 28.
Here are the top 3 small cap stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Small Cap Stocks
These are the small cap stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Small Cap Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
|Unisys Corp. (UIS)||11.76||740.5||0.7|
|XBiotech Inc. (XBIT)||14.78||426.5||0.9|
|Northern Oil & Gas Inc. (NOG)||0.83||338.8||1.0|
- Unisys Corp.: Unisys is an information technology (IT) consulting services company. The company provides data analytics, mobility, network, security, and outsourcing services for a range of clients globally.
- XBiotech Inc.: XBiotech is a biopharmaceutical company that discovers, develops, and commercializes monoclonal antibodies for treating a variety of diseases, including cancer, vascular disease, inflammatory skin disease, and diabetes.
- Northern Oil & Gas Inc.: Northern Oil & Gas is engaged in the acquisition, exploration, development, and production of crude oil and natural gas properties. The company reported a return to positive revenue and net income largely driven by a mark-to-market gain on unsettled commodity derivatives for Q1 2020, which ended March 31, 2020. Lower oil prices resulting from the COVID-19 pandemic has forced Northern's operators to curtail production. Despite that, the company says it has a strong oil hedge position that should allow it to earn between $350 million and $410 million in adjusted EBITDA for 2020.
Fastest Growing Small Cap Stocks
These are the small cap stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Small Cap Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|TRI Pointe Group Inc. (TPH)||15.39||2.0||48,000|
|Progyny Inc. (PGNY)||24.01||2.0||10,430|
|Magellan Health Inc. (MGLN)||73.75||1.8||3,550|
- TRI Pointe Group Inc.: TRI Pointe Group is a homebuilding company that designs, builds, and sells single family residential homes. The company posted net income growth of 44,806% on revenue growth of 21% for Q1 2020, which ended March 31, 2020. TRI Pointe withdrew its previously issued guidance for fiscal year (FY) 2020 due to the effects of the ongoing pandemic.
- Progyny Inc.: Progyny is a fertility benefits management company. It offers patients benefits solutions, with education and guidance, from a Patient Care Advocate. It also provides access to a network of fertility specialists.
- Magellan Health Inc.: Magellan Health coordinates and manages the delivery of behavioral health care treatment services through a network of contracted third-party treatment providers. The company announced in early April the appointment of Tim Lacy to the role of Chief Growth Officer.
Small Cap Stocks with the Most Momentum
These are the small cap stocks that had the highest total return over the last 12 months.
|Small Cap Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Novavax Inc. (NVAX)||45.46||2.7||642.9|
|Kodiak Sciences Inc. (KOD)||64.52||2.9||577.0|
|ChemoCentryx Inc. (CCXI)||63.14||3.9||439.2|
|Russell 2000 Index (RUT)||N/A||N/A||-3.7|
- Novavax Inc.: Novavax is a clinical stage biotechnology company that creates novel vaccines for a range of infectious diseases. The company makes use of proprietary virus-like particle (VLP) technology. Novavax reported a net loss as revenue declined 15% in Q1 2020, which ended March 31, 2020. The company is attempting to develop a vaccine for COVID-19.
- Kodiak Sciences Inc.: Kodiak Sciences is a biopharmaceutical company that develops therapies for high-prevalence diseases of the eye.
- ChemoCentryx Inc.: ChemoCentryx is a biopharmaceutical company that researches orally-administered small-molecule therapies for inflammatory diseases.
YCharts. "Financial Data," Accessed May 28, 2020.
Northern Oil & Gas Inc. "Northern Oil and Gas, Inc. Announces First Quarter 2020 Results," Accessed May 28, 2020.
TRI Pointe Group Inc. "TRI POINTE GROUP, INC. REPORTS 2020 FIRST QUARTER RESULTS," Accessed May 28, 2020.
Magellan Health Inc. "Magellan Health Appoints Tim Lacy as Chief Growth Officer," Accessed May 28, 2020.
Novavax Inc. "Novavax Reports First Quarter 2020 Financial Results," Accessed May 28, 2020.