The massive run of the major indexes has been stunning over the past 18 months, and the wealth generated by it has been a huge positive for many Americans. However, the reality is that the stock market, especially the large-cap market leaders, is very overbought and trading at multiples that are way above the normal levels. In addition, investors are duplicating their portfolio and in many cases not even realizing it.
Microsoft, Apple, Amazon, Tesla, Alphabet, Meta (Facebook) and Nvidia are at 26.41% of the SPY fund and those same stocks are 50.76% of the QQQ fund. If you own both of these popular equity funds, you have the same position over and over. Small-cap stocks can help you diversify, and they are the cheapest when compared to their large-cap brethren as they have been in years.
A small-cap stock is typically one from a company with a market capitalization of less than $2 billion, However, larger companies in the group often have a market cap as high as $6 billion. Combined with other investment strategies, small-cap stocks can help diversify a portfolio and also help investors stop duplicating their holdings.
We screened our 24/7 Wall St. research universe looking for well-known small caps that are rated Buy. The following five that look like great buys now. It is still important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Citi Trends
This top small-cap is loved across Wall Street and hedge funds own a pile of it. Citi Trends Inc. (NASDAQ: CTRN) operates as a value-priced retailer of fashion apparel, accessories and home goods primarily to African American and Latinx families in the United States. As of January 30, 2021, the company operated 585 stores in urban and rural markets in 33 states.
The company offers apparel, such as fashion sportswear and footwear for men, ladies and kids, including newborns, infants, toddlers, boys and girls, as well as sleepwear, lingerie, scrubs and kids uniforms. It offers undergarments and outerwear for men and women.
Its accessories include handbags, luggage, hats, belts, sunglasses, jewelry and watches. The company offers home and lifestyle products for the bedroom, bathroom and kitchen, including decorative accessories; food, tech, team sports and health products; and seasonal items, books and toys. It
Craig Hallum has a huge $165 price target on Citi Trends stock. The consensus target is much lower at $131.25, and the shares closed Wednesday at $84.14, after a pop of almost 4% for the day.
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