3-year annualized revenue growth: 418.2% (3-year annualized).Here, then, are 12 small-cap growth stocks to buy if you're constructing a diversified portfolio and need a little oomph. Once investors come to the realization that small-cap stocks should have superior potential returns over the next two to three years, however, you'll see small-cap stocks' valuations (and, of course, their prices) rise dramatically.
That's because they're largely being valued at or near historical lows. economy starts to recover, however, small-cap growth stocks will benefit the most. "And investors have been forced into mega cap stocks because if you are benchmarked against the S&P 500 and you don't own Facebook, Apple, Netflix, etc., you are going to trail the index, and that sucks money out of the small-cap sector."Īs the U.S.
Opportunities Fund portfolio manager Nick Ford recently told CNBC. "We are just exiting a seven-year underperformance cycle partially driven by the popularity of mega stocks, particularly the FAANGs (Facebook, Apple, Amazon, Netflix, Google)," U.K.-based Miton U.S. That's great news for portfolio managers overseeing small-cap stocks, which have suffered significant underperformance in recent years. While the novel coronavirus continues to inflict pain in the U.S., investors are looking for companies with greater earnings visibility.