For investors, small-cap stocks can be a great idea. They offer an opportunity for massive growth potential that can often outpace even a blue-chip stock.
Small-cap stocks have relatively low market capitalization, ranging from several hundred million to $1 billion and more. If one of these names takes fire, it’s much easier to double market cap than it is if you’re already at a level of several hundred billion dollars.
But beware: the very nature of small-cap stocks makes them riskier bets than the traditional blue chips. But if you’re willing to embrace the risks, small-cap stocks are a great way to diversify your portfolio and chart out a path for outsized growth.
We used the Portfolio Grader to evaluate these small-cap stocks, evaluating them for revenue and profit growth, earnings performance, analyst sentiment and momentum. Notably, every name on the list gets an “A” rating in the growth metric of the Portfolio Grader.
So if you’re looking for some off-the-beaten-path picks and the possibility of outstanding returns, consider these names.
Dorian LPG (LPG)
It takes a lot of ship to move liquefied petroleum gas efficiently. However, transporting fuel products can be a lucrative business, particularly when the cost of fuel products is on the rise.
Dorian LPG (NYSE:LPG) operates 25 very large gas carriers (called VLGCs) with a 2.1 million cubic meters capacity. That’s plenty to keep your portable heaters, propane barbeque grills and gas fireplaces going.
It also does a good job of taking care of its shareholders. Dorian has a dividend yield of 9.2%, and announced an irregular dividend payable next month of $1 per share.
Management issued preliminary third-quarter results for the quarter ending Dec. 31. Revenue is expected to be in a range of $161.3 million to $163.3 million. That would be much higher than a year ago, when the company posted revenue of $103.3 million in the third quarter of fiscal 2023.
LPG stock is up 130% in the last year and gets an “A” rating in the Portfolio Grader.
ACM Research (AMCR)
California-based ACM Research (NASDAQ:AMCR) is becoming an important player in the tech world.
While it doesn’t make the lucrative semiconductor chips that power generative artificial intelligence, it makes equipment for wafer cleaning, polishing and inspection.
And as global reliance on semiconductors grows, so will the market opportunity for ACM Research. With a location in China, the company strategically positions itself to serve clients on both sides of the Pacific.
Preliminary fourth-quarter revenue is in a range of $530 million to $545 million, and increase from the range of $520 million to $540 million that the company projected in the third quarter. Full-year revenue is now projected to be between $650 million to $725 million.
AMCR stock is up 80% in the last year and gets an “A” rating in the Portfolio Grader.
OppFi (OPFI)
OppFi (NYSE:OPFI), or Opportunity Financial, is a fintech company that operates a platform that connects borrowers to lenders. The company’s loans are usually between $500 to $4,000, rather than large loans for vehicles, houses or debt consolidation.
But there’s certainly a market for alternative personal loans, particularly as U.S. households carry $17.29 trillion in debt, up 1.3% in the third quarter.
Third-quarter revenue was up 7% from a year ago at $133.1 million. OppFi also reaffirmed its full-year revenue guidance of $500 million to $520 million and increased its net income forecast from $29 million to $35 million to $40 million to $42 million.
OPFI stock is up 66% in the last year and gets an “A” rating in the Portfolio Grader.
VTEX (VTEX)
VTEX (NYSE:VTEX) is a European company that works in the e-commerce space. The company’s digital commerce platform processes orders and manages inventory in multiple channels.
By managing orders and viewing inventory on a single platform, VTEX helps its customers perform business-to-business and business-to-consumer functions.
VTEX has more than 3,400 online stores in 38 countries, and partners with some of the biggest retailers and consumer goods companies on the planet.
On Black Friday VTEX handled $353.8 million in goods, up 41% from a year ago. At its peak, VTEX processed 2,800 orders per minute.
Revenue in the third quarter was $50.6 million, up from $38.8 million a year ago. VTEX stock is up 86% in the last year and gets an “A” rating in the Portfolio Grader.
Yiren Digital (YRD)
Yiren Digital (NYSE:YRD) is a Chinese company that provides individual and business insurance, lifestyle and digital financial services.
Shoppers can get personal and business loans that are originated by Yiren but financed by third-party institutional funding partners.
The company used to be a peer-to-peer lending platform, but Beijing regulators cracked down on the industry, prompting a move to its institutional funding-based product.
Yiren struggled mightily in 2021 and 2022 and, for a while, dropped below $1 per share. But now the stock is on the verge of exiting penny stock territory as shares approach $5.
Revenue in the third quarter reached $179.7 million, up 55.9% from a year ago. Total loans in the quarter were $1.3 billion, up 20.3% from last year.
YRD stock is up 67% in the last year and gets an “A” rating in the Portfolio Grader.
Ardelyx (ARDX)
Ardelyx (NASDAQ:ARDX) is a Massachusetts-based pharmaceutical company.
Its top drugs are Ibsrela, which is used to treat irritable bowel syndrome; and Xphozah, a treatment for chronic kidney disease. It also has potential treatments in its platform for hyperkalemia and metabolic acidosis.
The company projects Ibsrela revenue for 2023 to reach $80 million, which is a solid number for its first full calendar year. Management believes that the number will grow to $140 million to $150 million in 2024, eventually reaching $1 billion annually.
Xphozah was only approved in October and sales began a month later. Ardelyx says it expects $2.5 million in sales for the first quarter.
The company is growing fast. Revenue in the third quarter was $56.4 million, up from just $5 million a year ago. The stock is up 166% in the last year and gets an “A” rating in the Portfolio Grader.
CleanSpark (CLSK)
CleanSpark (NASDAQ:CLSK) is a mining company for Bitcoin (BTC-USD). It has five data centers in Georgia and one in New York.
The company is one on the move. It already has nearly 89,000 Bitcoin miners, producing the digital currency at a rate of 10 exahashes per second. But it has a deal to purchase another 160,000 miners, giving it another 32 exahashes per second of production. CleanSpark says its goal is to reach 50 exahashes.
This company gets more profitable as the price of Bitcoin goes up, and BTC has been on a roll. Despite a recent dip, Bitcoin is still around the $40,000 range and is up 60% in the last year.
So, it’s no surprise that CleanSpark stock is up 160% in the last 12 months. It gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier held LPG. He did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
On the date of publication, the InvestorPlace Research Staff member primarily responsible for this article held BTC-USD and ARDX. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
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