Small cap stocks are public companies that have market capitalizations ranging from $300 million to $2 billion. Since the share prices of these companies can be very volatile, some companies in the small cap universe or in small cap indexes, can have market caps significantly higher than this range at any particular time. Some of the stocks classified as small caps include movie theater chain AMC Entertainment Holdings Inc. (AMC), printing and imaging company Eastman Kodak Co. (KODK), and retail drug store chain Rite Aid Corp. (RAD).
Small cap stocks, as represented by the Russell 2000 Index, have slightly underperformed the broader market. The Russell 2000 has provided a total return of 20.2% over the past 12 months, below the Russell 1000’s total return of 21.2%, as of December 18, 2020. All statistics in the tables below are as of December 21.
Here are the top 3 small cap stocks with the best value, the fastest growth, and the most momentum.
Best Value Small Cap Stocks
These are the small cap stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Small Cap Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
|XBiotech Inc. (XBIT)||17.03||498.3||1.1|
|Unisys Corp. (UIS)||18.25||1,150||1.3|
|VirnetX Holding Corp. (VHC)||5.18||368.1||1.3|
- 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.
- 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.
- 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. The company announced in early November that it recently had been awarded $502.8 million as part of a favorable verdict from a federal jury pertaining to a patent-infringement lawsuit against Apple Inc. (AAPL).
Fastest Growing Small Cap Stocks
These are the small cap stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Small Cap Stocks|
|Price ($)||Market Cap ($M)||EPS Growth (%)|
|Smith & Wesson Brands Inc. (SWBI)||17.22||964.0||4,500|
|National Vision Holdings Inc. (EYE)||45.85||3,715||4,100|
|A10 Networks Inc. (ATEN)||9.73||746.4||3,560|
- Smith & Wesson Brands Inc.: Smith & Wesson Brands manufactures firearms, including pistols, revolvers, rifles, and other related products and accessories. The company posted net income growth of 3,940.3% on net sales growth of 118.7% in Q2 of the company’s 2021 fiscal year (FY), the three-month period that ended October 31, 2020. In addition to soaring net sales, net income growth was fueled by lower interest expenses compared to the year-ago quarter and total operating expenses that rose at a much slower rate than net sales.
- National Vision Holdings Inc.: National Vision Holdings is an optical retail company. It offers various eye-care products and services, including eye exams, eyeglasses, and contact lenses.
- A10 Networks Inc.: 10 Networks is a provider of computer networking products and security solutions. It offers a range of hardware, software, and cloud-based products, such as controller, firewall, protection systems, and more.
Small Cap Stocks with the Most Momentum
These are the small cap stocks that had the highest total return over the last 12 months.
|Small Cap Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Novavax Inc. (NVAX)||124.85||7.9||3,060|
|Vaxart Inc. (VXRT)||7.37||0.8||2,360|
|FuelCell Energy Inc. (FCEL)||9.30||3.0||1,250|
- 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. The company announced on December 16 that the government of New Zealand has agreed to purchase 10.7 million doses of NVX-CoV2373, Novavax’ COVID-19 vaccine candidate, which is currently undergoing phase 3 clinical testing. The company also announced on December 21 the appointment of Rick Crowley to the newly created position of executive vice president, chief operations officer (COO). Crowley joins Novavax from TerSera Pharmaceuticals LLC.
- 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 November 12, the company reported a net loss of $8.1 million as revenue fell 41.6% in Q3 2020, which ended September 30, 2020. Vaxart is developing a single-dose COVID-19 tablet vaccine. Its VXA-CoV2-1 vaccine candidate, to be given in a tablet, recently completed enrollment in the company’s phase 1 study.
- FuelCell Energy Inc.: FuelCell Energy provides fuel cell power solutions. It develops fuel cell power plants for electric power generation, and has contracts to develop fuel cells for alternative fuels and for marine transportation applications.