Stocks with market a capitalization of $300 million - $2 billion are typically characterized as small-cap stocks. These stocks are usually considered riskier investments because they typically have low liquidity and the companies are not well known. While low liquidity can cause significant price fluctuation based on buying and selling activity, less popularity typically leads to less attention from retail investors and Wall Street analysts, which can lead to overlooked bargains.
However, with the sustained rally of the stock markets over the past year, many large-cap stocks have become highly overvalued. Investors can find more upside potential in small-cap stocks that remained under the radar. The overall performance of small-cap stocks can be gauged by the performance of the Vanguard Russell 2000 Index Fund ETF (VTWO) which has gained 36.2% over the past year.
Despite delivering decent returns over the past year, LLC (BCC), ArcBest Corporation (ARCB), and Oppenheimer Holdings, Inc. (OPY) are gearing up for further gains. These companies have solid business models and are expected to keep growing their revenues and earnings.
Boise Cascade, LLC (BCC)
BCC is involved in the manufacturing and distribution of wood-based products. The company has operations in the U.S. and Canada. BCC’s stock has gained 33.6% over the past year and closed the last trading session at $52.15.
The company is planning on opening a second shop in Texas. The new location will focus on wooden doors primarily.
For the quarter ended September 30, 2020, the company saw an increase in sales of 25% compared to the same period last year. Its net income grew 280% during the same period.
BCC is expected to see revenue growth of 21.6% for the quarter ended December 31, 2020 and 11.9% for the quarter ended March 31, 2021. The company’s EPS is estimated to grow 174.2% for the quarter ended March 31, 2021 and at a rate of 9.6% per annum over the next five years.
BCC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
It has an A grade for Growth and Value. In the A-rated, five-stock Industrial - Wood industry, it is ranked #1.
In total, we rate BCC on eight different levels. Beyond what we stated above we also have given BCC grades for Stability, Sentiment, Momentum, and Quality. Get all the BCC ratings here.
ArcBest Corporation (ARCB)
ARCB delivers freight transportation solutions and integrated logistics services. The company has worldwide operations. ARCB’s stock has returned 133.1% over the past year to close Friday’s trading session at $57.
ARCB has recently realigned its customer-facing teams and asset-light operations teams. The realignment was made to provide better services to enterprise customers. The company has also increased the rates for its ABF Freight services by approximately 5.95%.
For the quarter ended December 31, 2020, the company reported an increase in revenue of 8% compared to the same period last year. The company’s total shipments per day increased 2.8% during the same period.
ARCB’s revenue is estimated to increase 12.1% for the quarter ended March 31, 2021 and 12% in 2021. The company’s EPS is expected to rise 25.4% in 2021 and at the rate of 14.1% per annum over the next five years.
The POWR Ratings are also high on ARCB as it has an Overall Rating of A, which translates to a Strong Buy. The stock has an A grade for Growth and Value. In the B-rated, 52-stock Auto & Vehicle Manufacturers industry, it is ranked #6.
Click here to see the additional POWR Ratings for ARCB (Quality, Stability, Momentum, and Sentiment).
Oppenheimer Holdings, Inc. (OPY)
OPY is involved in providing wealth management, securities brokerage, and investment banking services. The company’s clientele consists primarily of high net-worth individuals and governments, businesses, and institutions. OPY closed Friday’s trading session at $37.1, gaining 37.9% over the past year.
OPY is currently focused on building its debt capital markets group with the appointment of Guillaume Petitgas as managing director. The company is also accelerating the growth of its consumer investment banking group with the appointment of James Murray as managing director.
For the quarter ended December 31, 2020, the company reported an increase in net income of 132% year-over-year. OPY’s EPS is expected to rise at a rate of 15% per annum over the next five years.
OPY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary ratings system. OPY has an A grade for Growth and Value. In the A-rated, 24-stock Investment Brokerage industry, it is ranked #3.
Beyond what we stated above we also have given OPY a grade for Sentiment, Quality, Stability, and Momentum. Get all the OPY ratings here.
The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
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BCC shares were trading at $52.44 per share on Tuesday afternoon, up $0.29 (+0.56%). Year-to-date, BCC has gained 9.71%, versus a 4.95% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.
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