Small cap stocks are public companies that have market capitalizations ranging from $300 million to $2 billion. Since the share prices of these companies can be very volatile, some companies in the small cap universe or in small cap indexes, can have market caps significantly higher than this range at any particular time. Some of the stocks classified as small caps include movie theater chain AMC Entertainment Holdings Inc. (AMC), printing and imaging company Eastman Kodak Co. (KODK), and retail drug store chain Rite Aid Corp. (RAD).
Small cap stocks, as represented by the Russell 2000 Index, have outperformed the broader market. This group of companies recently has begun to pull ahead of the broader market. The Russell 2000 has provided a total return of 26.6% over the past 12 months, above the Russell 1000's total return of 18.1%, as of January 18, 2021. All statistics in the tables below are as of January 19.
Here are the top 3 small cap stocks with the best value, the fastest growth, and the most momentum.
Best Value Small Cap Stocks
These are the small cap stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Small Cap Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
|VirnetX Holding Corp. (VHC)||5.69||404.3||1.4|
|Unisys Corp. (UIS)||24.01||1,514||1.6|
|Tronox Holdings PLC (TROX)||14.66||2,105||2.3|
- VirnetX Holding Corp.: VirnetX, through its subsidiaries, develops software to facilitate real-time communications online. This includes voice over internet protocol, encryption, file transfer, streaming, and similar services. On January 15, the company announced that the U.S. District Court for the Eastern District of Texas had affirmed a $502.8 million jury verdict, as well as additional fees and royalties. The ruling in favor of VirnetX was based on Apple Inc.'s (AAPL) infringement of two network security patents.
- 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. In January, Unisys announced an agreement with Massachusetts Mutual Life Insurance Company to purchase a group annuity contract for about $280 million. Unisys said this will result in a one-time, pre-tax settlement charge of roughly $150 million.
- Tronox Holdings PLC: Tronox Holdings is a U.K.-based holding company which, through subsidiaries, manufactures chemical products including paints, plastics, and mineral sands. The company markets its products in the U.K.
Fastest Growing Small Cap Stocks
These are the small cap stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Small Cap Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Smith & Wesson Brands Inc. (SWBI)||21.17||1.2||4,500|
|National Vision Holdings Inc. (EYE)||48.64||3.9||4,100|
|A10 Networks Inc. (ATEN)||9.86||0.8||3,560|
- Smith & Wesson Brands Inc.: Smith & Wesson Brands manufactures firearms, including pistols, revolvers, rifles, and other related products and accessories.
- National Vision Holdings Inc.: National Vision Holdings is an optical retail company. It offers various eye-care products and services, including eye exams, eyeglasses, and contact lenses.
- A10 Networks Inc.: 10 Networks is a provider of computer networking products and security solutions. It offers a range of hardware, software, and cloud-based products, such as controller, firewall, protection systems, and more.
Small Cap Stocks with the Most Momentum
These are the small cap stocks that had the highest total return over the last 12 months.
|Small Cap Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Novavax Inc. (NVAX)||127.43||8.1||2,810|
|Vaxart Inc. (VXRT)||7.18||0.8||1,670|
|Veritone Inc. (VERI)||38.69||1.2||1,510|
- 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 January 7, Novavax announced that it had finalized an Advance Purchase Agreement with the Commonwealth of Australia for 51 million doses of its COVID-19 vaccine candidate. A preliminary agreement was announced in November 2020.
- 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.
- Veritone Inc.: Veritone is a cloud-based artificial intelligence media technology company. The firm develops a cloud-based system that enables audio and video processing, audience analytics, search, replay, and share capabilities in real time. In January, Veritone announced a strategic partnership with Alteryx Inc. (AYX), an analytic procession automation company. Through the partnership, the companies plan to deliver AI-powered insights into video, images, audo and. other unstructured data sources to Alteryx customers. The company said the partnership could have a beneficial impact on industries including insurance, financial services, healthcare, oil and gas, and government.
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YCharts. "Financial Data." Accessed Jan. 19, 2021.
VirnetX Holding Corp. "VirnetX Receives $502.8 Million Plus Interest, Supplemental Damages, Costs and Ongoing Royalties in Final Judgment in Apple Suit." Accessed Jan. 19, 2021.
Unisys Corp. "Unisys Agrees to Transfer a Portion of its U.S. Pension Obligations to MassMutual, Marking Latest Step in Reducing Pension Exposure." Accessed Jan. 19, 2021.
Novavax Inc. "Novavax Finalizes Agreement with Commonwealth of Australia for 51 Million Doses of COVID-19 Vaccine." Accessed Jan. 19, 2021.
Veritone Inc. "Veritone and Alteryx Announce Strategic Relationship to Power the Alteryx Analytic Process Automation Platform With New, Advanced AI Capabilities." Accessed Jan. 19, 2021.