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 $10 billion are also found in the small cap universe. Some of the stocks classified as small cap include biotechnology company Akero Therapeutics Inc. (AKRO), Tupperware Brands Corp. (TUP), and cloud-computing business Fastly Inc. (FSLY).
Small Cap stocks, as represented by the Russell 2000 Index (RUT), have underperformed the broader market, providing investors with a total return of -4.6% compared to the S&P 500's total return of 8.9% over the past 12 months. These market performance numbers and the statistics in the tables below are as of July 28.
Here are the top 3 small cap stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Small Cap Stocks
These are the small cap stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Small Cap Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
|Unisys Corp. (UIS)||11.51||724.8||0.7|
|XBiotech Inc. (XBIT)||15.53||448.1||1.0|
|Talos Energy Inc. (TALO)||7.08||462.6||1.2|
- 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. On April 28, Unisys reported a net loss of $53.2 million on a 7.1% revenue decline for Q1 2020, which ended March 31, 2020. The company also withdrew its guidance in light of the COVID-19 pandemic.
- 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.
- Talos Energy Inc.: Talos Energy is an energy company engaged in the exploration and production of oil and natural gas. It is focused on the exploration and development of shallow and deepwater assets in the Gulf of Mexico. On May 6, Talos Energy reported revenue growth of 5.1% for Q1 2020, which ended March 31, 2020. The company also posted positive net income of $157.7 million compared to a net loss of $109.6 million in the same quarter a year ago.
Fastest Growing Small Cap Stocks
These are the small cap stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Small Cap Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Range Resources Corp. (RRC)||5.98||1.5||5,700|
|Magellan Health Inc. (MGLN)||75.00||1.9||3,550|
|Cerence Inc. (CRNC)||39.62||1.4||2,540|
- Range Resources Corp.: Range Resources is an energy company engaged in the acquisition, exploration, and development of oil and gas properties in the Appalachian and Mid-continent regions of the U.S. On April 30, the company reported net income growth of 10,117% on a revenue decline of 7% for Q1 2020, which ended March 31, 2020. Range Resources said that its earnings results were positively affected by a gain on asset sales worth $122 million and a $233 million derivative fair-value gain resulting from decreases in commodity prices.
- Magellan Health Inc.: Magellan Health coordinates and manages the delivery of behavioral health care treatment services through a network of contracted third-party treatment providers.
- Cerence Inc.: Cerence produces automotive cognitive assistance solutions to power interactions between automobiles, drivers, passengers, and the broader digital world. The company also sells software licenses and cloud-connected services.
Small Cap Stocks with the Most Momentum
These are the small cap stocks that had the highest total return over the last 12 months.
|Small Cap Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Novavax Inc. (NVAX)||139.60||8.2||3,180|
|Co-Diagnostics Inc. (CODX)||22.12||0.6||1,560|
|Vaxart Inc. (VXRT)||11.16||1.2||1,520|
|Russell 2000 Index (RUT)||N/A||N/A||-4.6|
- Novavax Inc.: Novavax is a clinical stage biotechnology company that creates vaccines to address a wide range of infectious diseases using proprietary virus-like particle (VLP) technology. On June 4, the company announced it had received a contract of up to $60 million from U.S. Department of Defense to manufacture NVX‑CoV2373, Novavax’ COVID-19 vaccine candidate. The company announced in mid-June the appointment of Filip Dubovsky as Senior Vice President and Chief Medical Officer.
- Co-Diagnostics Inc.: Co-Diagnostics operates as a molecular diagnostics company that develops and manufactures diagnostics technology. The company's diagnostics systems enable molecular testing for organisms and genetic diseases.The company on May 26 said that researchers had used its Logix Smart™ COVID-19 Test Kit to demonstrate that, SARS-CoV-2, the virus that causes COVID-19, "can be detected in cancer tissue of coronavirus patients, even before symptoms occur."
- Vaxart Inc.: Vaxart is a clinical-stage biotechnology company that develops oral recombinant vaccines. Its vaccines operate on the immune system of the gut to generate systemic and mucosal immune responses. On June 26, the company announced that its oral COVID-19 vaccine was selected to participate in a non-human primate (NHP) challenge study, organized and funded by the U.S. government's Operation Warp Speed initiative. The study's goal is to prove the efficacy of Vaxart’s oral COVID-19 vaccine candidate. The company announced in mid-June the appointment of Andrei Floriu to the role of Chief Executive Officer (CEO).
YCharts. "Financial Data." Accessed Jul. 28, 2020.
Unisys Corp. "Unisys Announces First-Quarter Results; Completes U.S. Federal Sale; Strong Balance Sheet and Liquidity Position." Accessed Jul. 28, 2020.
Talos Energy Inc. "TALOS ENERGY ANNOUNCES FIRST QUARTER 2020 FINANCIAL AND OPERATIONAL RESULTS AS WELL AS UPDATED 2020 GUIDANCE." Accessed Jul. 28, 2020.
Range Resources Corp. "Range Announces First Quarter 2020 Financial Results." Accessed Jul. 28, 2020.
Novavax. "Novavax Awarded Department of Defense Contract for COVID-19 Vaccine." Accessed Jul. 29, 2020.
Novavax Inc. "Novavax Announces Additions to Executive Leadership." Accessed Jul. 28, 2020.
Co-Diagnostics. "Co-Diagnostics, Inc. COVID-19 Test Successfully Used to Identify Coronavirus in Cancer Tissue." Accessed Jul. 29, 2020.
Vaxart. "OWS to Test First Oral COVID-19 Vaccine in Non-Human Primates." Accessed Jul. 29, 2020.
Vaxart Inc. "Vaxart, Inc. Appoints New CEO to Accelerate Advancement of COVID-19 and Other Programs." Accessed Jul. 28, 2020.