Stock surge for smaller companies in the USA - lesser market cap, significant prospects
Small-caps and high-flyers are making a comeback in the stock market, offering exciting opportunities for investors. In a significant turn of events, U.S. small-caps have outperformed the Nasdaq 100 by the largest margin in nearly four decades. This resurgence is driven by hope for lower interest rates, valuation fantasies, and the return of earnings growth.
Small-caps, known for their growth-oriented nature, are currently undervalued and interest-rate sensitive. The S&P 500 is currently trading at around 24 times expected earnings, while small-caps are at around 16 times - a decade-long discount. This presents a prime opportunity for investors to capitalize on the growth potential of small-caps.
Two selected small-caps offering a mix of operational strength, technological relevance, and strategic tailwinds are making headlines. The first high-flyer is a leader in the decentralized energy supply for AI data centers. Since recommendation, it has soared by over 120%, with big names like Oracle using the solution.
The second high-flyer is a specialist in secure satellite communication. A billion-dollar acquisition has improved profitability and opened up new growth markets.
Analysts see significant potential in new contracts, additional frequency rights, and a significant expansion of network capacity by 2026 for the satellite communication stock. Earnings estimates for the Russell 2000 are rising sharply, with analysts predicting around 30% growth by 2026.
For those interested in learning more about these promising small-caps, the details can be found in the new issue of DER AKTIONÄR (from page 36). The monthly subscription to DER AKTIONÄR, Germany's largest financial magazine, is available for €19.90 instead of €31.20 in the first month. Subscribing also grants access to exclusive insights and analysis.
In addition to these high-flyers, there are other small-caps offering potential opportunities in the current stock market rally. The two small stocks appearing with potential opportunities are Palantir Technologies, noted for its very ambitious valuation despite price setbacks, and the Verve Group, which has a lower valuation but less growth. Almonty Industries is also highlighted for expected revenue growth due to ramping up its Sangdong tungsten mine, implying potential buying opportunities after price dips.
Small-caps tend to benefit more from monetary policy easing, making them an attractive investment option in the current economic climate. This resurgence of small-caps opens up new opportunities for investors, especially as smaller companies tend to benefit more from monetary policy easing.
In conclusion, the resurgence of small-caps and high-flyers presents a prime opportunity for investors to capitalize on the growth potential of these companies. By subscribing to DER AKTIONÄR, investors can gain access to exclusive insights and analysis on these promising small-caps.
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