American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

S&P 600 rally to cool but these six small-cap stocks could continue to grow

by admin December 11, 2024
December 11, 2024
S&P 600 rally to cool but these six small-cap stocks could continue to grow

Small-cap stocks have enjoyed a stellar 2024, with the S&P 600 index soaring more than 14% year-to-date, driven by optimism surrounding President-elect Donald Trump’s fiscal policies.

This performance marked a significant milestone for the index, which recently closed at a record high of 1,544.

Small-caps benefited from their exposure to economically sensitive sectors such as financials and consumer discretionary, alongside limited reliance on technology compared to the S&P 500.

Trump’s proposed fiscal spending, estimated to inject tens of billions of dollars annually into the economy, fuelled investor enthusiasm.

The index, comprising companies with an average market capitalization of $3 billion, also stood to gain from expected tax cuts favouring domestic production.

Record inflows signal saturation

Net inflows into US small-cap funds have reached a record $30 billion this year, tripling last year’s figures, according to Bank of America.

However, history suggests this momentum may not sustain, as every year since 2010 that followed a record inflow to small-caps has subsequently experienced a net outflow.

This pattern indicates potential limitations for further investment into the asset class.

Dennis DeBusschere of 22V Research has cautioned against expecting further valuation gains in the near term.

“We don’t have another catalyst, near term, to justify a continued rerating higher in small caps…into year-end,” he noted.

This puts the onus on small-caps to deliver earnings growth that meets or exceeds expectations, a challenge given that current valuations already price in significant optimism.

Six small-cap stocks that could be resilient performers

To identify small-caps poised for sustained growth, analysts at Barron’s have focused on companies with strong earnings momentum and manageable valuations.

A recent screen of S&P 600 constituents by the publication highlighted 23 stocks meeting these criteria, including Steven Madden, Tripadvisor, Enova International, Allegiant Travel, LiveRamp Holdings, and Mr. Cooper Group.

Steven Madden, with a market cap of $3.2 billion, has consistently outperformed earnings expectations in seven of the past eight quarters.

The fashion brand anticipates mid-teens percentage growth in international sales, particularly in Europe, where it is gaining market share.

Analysts project the company’s revenue to grow by over 5% annually through 2026, with earnings per share (EPS) rising 12% annually, assuming stable product costs and marketing expenses.

Tripadvisor, valued at $2 billion, also stands out.

Despite competition from giants like Booking Holdings and Expedia Group, the company has achieved steady sales growth since 2020.

It derives revenue from hotel and airline advertising as well as restaurant reservations, supported by innovations like an artificial intelligence-powered assistant on its platform.

Analysts forecast annual revenue growth of nearly 7%, with adjusted EPS climbing 14% through 2026, thanks to improving margins and disciplined spending.

The post S&P 600 rally to cool but these six small-cap stocks could continue to grow appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Dow and S&P 500 flat as markets await US inflation data; Alaska Air Group shares jump, while NVIDIA and Oracle slip
next post
Here’s why the IONQ and Rigetti Computing stocks have surged

Related Posts

China’s November factory growth surges to 5-month high:...

December 2, 2024

AT&T, other phone companies sued over stolen nude...

July 31, 2024

AI chipmaker Cerebras Systems files for IPO to...

October 1, 2024

Pepsi and Delta say consumers are hunting for...

July 13, 2024

Amid scrutiny, Airbnb chases $1T experience market: could...

May 15, 2025

Morgan Stanley stock sits at record high: buy,...

October 25, 2024

Why does Saudi Arabia’s sovereign wealth fund continue...

November 13, 2024

Nvidia hits $3.17 tn, closes in on Apple’s...

May 14, 2025

Dave & Buster’s plan to allow betting on...

May 9, 2024

IonQ stock price forecast ahead of earnings: will...

February 25, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (3,022)
    • Investing (2,459)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved