Trading Concept
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Trading Concept
No Result
View All Result
Home Trading News

Small Growth Stocks Are on Sale. 3 That Are Worth a Look.

by
December 6, 2021
in Trading News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter
Text size

Shift4 Payments is on RBC Capital Market’s Small Cap Growth Idea list.

Courtesy of Shift4

Some of the fastest-growing small-cap companies have seen their stocks get hammered lately as investors worry about changes in the Federal Reserve’s monetary policy. That’s an opportunity to buy them on the cheap, if recent history is any guide.

The

RELATED POSTS

Energy agency chief warns transition to renewables is off track, issues warning on stranded assets

Buying the dip on energy stocks? Wall Street pros name their top picks

iShares Russell 2000 Growth Exchange-Traded Fund
(ticker: IWO), which tracks small-capitalization growth companies, has tanked 13% since Nov. 8, when it hit its highest level since mid-February. The decline in these stocks has partially been driven by the Federal Reserve’s plan to end its bond-buying program soon. Wiping out the Fed’s $80 billion in monthly long-dated bond purchases could pressure bond prices and lift their yields. That dents the valuations of companies expecting the bulk of their profits to come many years down the line. 

Small-cap growth stocks are trading at much cheaper valuations. For instance, the iShares Russell 2000 Growth ETF’s aggregate price to forward earnings multiple of 43.3 times is significantly lower than its Nov. 8 level of 51.9 times, according to FactSet. The multiple is also back around levels seen just before the start of the pandemic, when bond yields were higher—suggesting these stocks may already be pricing in the potential for a rise in bond yields.

Cheap valuations, however, aren’t reflecting the potential earnings growth for many of these companies. The ETF’s average expected per-share earnings growth rate for the next two years is 45%. Strong earnings growth could propel these stocks higher in coming years, so investors might want to think about getting in while the price is right.

Here are three stocks that RBC Capital Markets highlights on its quarterly Small Cap Growth Idea list—its highest conviction ideas for growth companies with market caps below $5 billion. RBC rates all three stocks Outperform.


Shift4 Payments

(FOUR) is provider of secure payment processing solutions with a market cap of $4.6 billion. The stock is down about 20% since Nov. 8, and its multiple on the next 12 months’ expected earnings has fallen to 43 times from 55 times over that period.

The company, however, just turned profitable this year and RBC expects it to grow its per-share earnings by 6 times from this year to 2023. While sales grow, so will profit margins, as the company scales. The analysts rate the stock Outperform with a $110 price target, more than double its current price. “The company is tapped into the large and secularly growing payments market in the U.S.,” the analysts wrote. 


Jamf Holding

(JAMF) is a $3.6 billion company that provides software to organizations to manage and protect their


Apple

(AAPL) products and systems. The stock is down 38% since Nov. 8, and its earnings multiple has fallen to 142 times from 164 times. The company’s EPS is expected to more than double by 2023 from this year. RBC analysts’s price target indicate gains of 83% for the stock. “Apple innovation has transformed the technology landscape,” RBC wrote. “Jamf is in a strong position to leverage the growing preference for Apple in the enterprise.” 


Ping Identity Holding

(PING) is a $2 billion identity solutions provider. The stock is down 24% and its price to earnings ratio has declined to 69 times from 87 times. The company’s EPS is expected to almost double by 2023. The RBC analysts see 82% upside to the stock over the next 12 months.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

ShareTweetPin

Related Posts

Energy agency chief warns transition to renewables is off track, issues warning on stranded assets

by
March 28, 2023
0

The current German coalition government is seeking to accelerate the country's transition away from fossil fuels and nuclear to renewable...

Buying the dip on energy stocks? Wall Street pros name their top picks

by
March 28, 2023
0

Energy was the second-best-performing sector of the S & P 500 last week, as investors flocked back into the stocks...

Chipotle to pay ex-employees $240,000 after closing Maine location that tried to unionize

by
March 28, 2023
0

In this article CMG Follow your favorite stocksCREATE FREE ACCOUNT Chipotle Mexican Grill has agreed to pay $240,000 to the...

Most Americans think Trump did something illegal or unethical, poll finds

by
March 28, 2023
0

Former US President Donald Trump speaks at a campaign event in Waco, Texas, US, on Saturday, March 25, 2023. Brandon...

4G internet is set to arrive on the moon later this year

by
March 28, 2023
0

In this article NOKNOKIA-FI Follow your favorite stocksCREATE FREE ACCOUNT Nokia hopes to install a data network on the moon...

Next Post

Can a Person Who Is Retired Continue to Fund an IRA?

S&P 500 futures gain slightly despite recent tech stock selling, bitcoin's weekend rout

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:



By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • WHO says Covid vaccine booster programs will prolong pandemic

    0 shares
    Share 0 Tweet 0
  • Forget Tesla — this auto stock is the one to buy right now, analyst says

    0 shares
    Share 0 Tweet 0
  • Spin or Split? AT&T Has a Big Decision to Make on Discovery Stake.

    0 shares
    Share 0 Tweet 0
  • Here’s how Carl Icahn is positioning for a possible recession in America

    0 shares
    Share 0 Tweet 0
  • Some lawmakers and their families are betting thousands of dollars on crypto

    0 shares
    Share 0 Tweet 0
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by tradingconcept.net
No Result
View All Result
  • Email Whitelisting
  • Home
  • Privacy Policy

All rights reserved by www.tradingconcept.net