Small cap stocks are public companies that have market capitalizations ranging from $300 million to $2 billion. Since the share prices of these companies can be very volatile, some companies in the small cap universe or in small cap indexes, can have market caps significantly higher than this range at any particular time. Some of the stocks classified as small caps include movie theater chain AMC Entertainment Holdings Inc. (AMC), printing and imaging company Eastman Kodak Co. (KODK), and retail drug store chain Rite Aid Corp. (RAD).
Small cap stocks, as represented by the Russell 2000 Index, have underperformed the broader market. The Russell 2000 has provided a total return of 16.0% over the past 12 months, below the broader Russell 1000’s total return of 19.0%, as of November 23, 2020. All statistics in the tables below are as of November 24.
Here are the top 3 small cap stocks with the best value, the fastest growth, and the most momentum.
Best Value Small Cap Stocks
These are the small cap stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Small Cap Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
|Unisys Corp. (UIS)||14.20||895.1||1.0|
|XBiotech Inc. (XBIT)||18.26||534.3||1.1|
|VirnetX Holding Corp. (VHC)||5.11||363.1||1.3|
- 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.
- 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.
- 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 $502.8 million as part of a favorable verdict from a federal jury pertaining to a lawsuit against Apple Inc. (AAPL). The federal jury in the U.S. District Court for the Eastern District of Texas found Apple guilty of infringement of two network security patents.
Fastest Growing Small Cap Stocks
These are the small cap stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Small Cap Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
Louisiana-Pacific Corp. (LPX)
|Citi Trends Inc. (CTRN)||32.87||0.3||6,230|
|Ultra Clean Holdings Inc. (UCTT)||30.12||1.2||5,800|
- Louisiana-Pacific Corp.: Louisiana-Pacific is a manufacturer of building materials and engineered wood products, which are used in home construction, repair and remodeling, and outdoor structures. Its products include flooring, radiant barrier panels, siding and trim, and laminated veneer lumber. The company posted net income growth of 17,600% on net sales growth of 31.8% in Q3 2020, which ended September 30, 2020. Net income was boosted by lower costs and expenses compared to the year-ago quarter. Louisiana-Pacific said that the COVID-19 pandemic had no material impact on its financial results during the quarter.
- Citi Trends Inc.: Citi Trends is a retailer of urban fashion apparel and accessories. It sells apparel, shoes, beauty products, accessories, and home decor. In a business update in late October, the company said it expected comparable store sales to increase about 5% in its fiscal third quarter, which ended October 31, 2020. Citi Trends also said that it opened six new stores during the quarter and announced the appointment of Pamela Edwards as Chief Financial Officer (CFO), effective January 4, 2021. Most recently, she has been the CFO at several divisions at L. Brands Inc. over the past 15 years. The company announces Q3 results before the open of trading on December 1.
- Ultra Clean Holdings Inc.: Ultra Clean Holdings develops and provides critical subsystems for the semiconductor capital equipment industry. Its products include precision robotic solutions, gas delivery systems, frame assemblies, process modules, and more.
Small Cap Stocks with the Most Momentum
These are the small cap stocks that had the highest total return over the last 12 months.
|Small Cap Stocks with the Most Momentum|
Market Cap ($M)
|12-Month Trailing Total Return (%)|
|Vaxart Inc. (VXRT)||7.12||778.9||2,480|
|Novavax Inc. (NVAX)||93.98||5,983||2,400|
|Nautilus Inc. (NLS)||18.36||555.6||1,180|
|Russell 2000 Index||N/A||N/A||16.0|
- 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.
- 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. Novavax recently announced the appointment of Gregory F. Covino as CFO along with several other leadership changes at the company.
- Nautilus Inc.: Nautilus develops and manufactures health and fitness products, including cardio and strength fitness equipment and related accessories. The company said it achieved record results in Q3 2020, which ended September 30, 2020. Net income of $33.8 million was a significant change from the net loss of $8.8 million in the year-ago quarter as net sales soared 151.8%. Nautilus said that consumer exercise habits and preferences were changing in profound ways amid the pandemic.