While the market jitters, there is one group of stocks that continue to outperform. That’s small caps. “A lot of the money coming into small caps is generated by trade jitters. It’s gotten to the point, where we can’t keep hoping trade will go away as an issue. This is part of the reality that’s coming out of Washington,” RBC strategist Lori Calvasina says. “Small caps right now are the safer risk trade.” Indeed, year-to-date the Russell 2000 small cap index is up 7%. This is versus the S&P 500 which is up only 1.67%.
So with this bullish analysis in mind, we turned to TipRanks’ powerful stock screener to source the 10 best small cap ideas out there. We specifically searched for Small Cap stocks with a ‘Strong Buy’ rating from top analysts, and big upside potential to boot. The screener has now been revamped to include price targets- enabling you to pinpoint stocks set to surge. Let’s take a closer look at how this works out in the results below. Here we cover the first five stocks, with the second set coming later in the week:
1. Health Insurance Innovations (NASDAQ:HIIQ)
As the name suggests, Health Insurance Innovations sells short-term medical plans. “We continue to believe that HIIQ is positioned to benefit from solid demand for alternative affordable insurance policies. With significant potential upside in the shares, our rating is Overweight” cheered Cantor Fitzgerald analyst Steven Halper (Profile & Recommendations) recently. This top 100 analyst has a $60 price target on HIIQ, indicating 85% upside potential from current levels.
Two big catalysts on the horizon: resolution of its multi-state review and President Trump’s executive order allowing for the sale of 364-day policies (compared to just 3 months). As we can see below, four analysts have published HIIQ Buy ratings in the last three months. This comes with a $52 average price target (62% upside).
2. Manitowoc Company (NYSE:MTW)
Manitowoc produces cranes for the construction industry. In the last month, both JP Morgan and SunTrust Robinson upgraded their MTW ratings. Why? Well SunTrust Robinson’s Charles Brady (Profile & Recommendations) left the company’s Crane Day “impressed” with the pace and breadth of new product development. He sees meaningful earnings accretion for Manitowoc on the horizon, and raised his 2018 and 2019 EPS estimates. Brady is now modelling for 47c and $1.44 up from 32c and $1.22, respectively. This comes with a $33 price target (28% upside potential).
Five analysts have published buy ratings in the last three months, vs just 1 hold rating. These analysts (on average) see prices rising 39% to $36. View MTW Price Target & Analyst Ratings Details.
3. Gray Television (NYSE:GTN)
Atlanta based TV-station owner Gray Television is buzzing right now. The company has just snapped up Raycom Media in a $3.65 billion deal. “The deal positives appear to vastly outweigh the associated risks” stated top Benchmark analyst Daniel Kurnos (Profile & Recommendations).
“The merger will bring Gray’s national reach to 24%, effectively eliminating the one major criticism of the otherwise strong operator, while enhancing projected free cash flow by over 80%” he explains. Moreover, it meshes two highly complementary station portfolios from both a quality and culture perspective. Kurnos’ bullish $26 price target indicates 65% upside potential- placing him slightly above the Street:
4. uniQure NV (NASDAQ:QURE)
Breaking news! uniQure has just announced it has enrolled its 1st patient in the pivotal phase III study of AAV5-based gene-based therapy, AMT-061, for hemophilia B. The stock is a Chardan Top Pick for 2018. Five-star Chardan analyst Gbola Amusa (Profile & Recommendations) writes that QURE “will likely be first to market for AAV-based hemophilia B [gene therapy].” Bear in mind that Hemophilia B is one of the largest orphan drug markets in the US. His $50 price target indicates 33% upside potential.
And we can see below how the stock has an impressive score with the Street overall.
5. Primo Water Corp (NASDAQ:PRMW)
From one top pick to the next. Barrington Research’s Michael Petusky (Profile & Recommendations) is a long-time supporter of drinks company Primo Water. The stock has rallied on the completion of a $70 million equity offering, but for Petusky this is just the beginning. He explains: “Simply put, we continue to be big fans of the Primo story and view the recent positive action in the shares as just the beginning. We continue to really like the favorable macro backdrop of the water industry and Primo’s dominant competitive position within the niche spaces in which it competes.”
Petusky has a $20 price target on PRMW (14% upside potential). Overall, 3 analysts have published Buy ratings on PRMW in the last three months with a $21 average price target. View PRMW Price Target & Analyst Ratings Details.
Find your own ‘Strong Buy’ stock ideas
The upgraded screener includes many exciting new datasets enabling you to refine your search options and find high-quality investing inspiration more easily and efficiently than ever before. New filters include Analyst Price Target and Best Analyst Price Target. Use these filters to find the Street’s most promising ‘Strong Buy’ stocks with over 20% upside potential from the current share price.