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【XM Market Review】--The Best Small-Cap Stocks to Buy Now
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The purpose of information release is to warn investors of risks and does not constitute any investment advice. The relevant data and information are from third parties and are for reference only. Investors are requested to verify before use and assume all risks.
Hello everyone, today XM Forex will bring you "【XM Market Review】--The Best Small-Cap Stocks to Buy Now". I hope it will be helpful to you! The original content is as follows:
Small-cap stocks too often make the headlines for the wrong reasons, including massive price swings, fraudulent activity, and accounting scandals. Most investors prefer large-cap and mega-cap stocks, such as those in the Magnificent Seven. Yet small-cap stocks offer the best growth potential of any cap size stocks. Should you consider adding some underdogs to your portfolio?
While there is no universal definition, small-cap stocks are publicly listed www.xmcnglobal.companies with market capitalizations between $250 million and $2 billion. The “cap” is short for market capitalization, which is the number of shares multiplied by the share price. For example:
- www.xmcnglobal.company XY2 has 50 million shares, and each share trades at $10.
- Therefore, the market cap is $500,000,000 (50 million x $10).
The Russell 2000 equity index is the primary small-cap index. It covers 2,000 small caps with market values between $240 million and $6 billion. Some argue that a few www.xmcnglobal.components of the Russell 2000 are mid-cap stocks, as the equity bull market has technically lifted them out of small-cap territory. Other small-cap indices are the S&P SmallCap 600 and the MSCI USA Small-Cap Index.
The Financial Industry Regulatory Authority (FINRA) has the following definition of small-cap, medium-cap, and large-cap stocks:
- Small-cap stocks have a market cap from $250 million to $2 billion.
- Mid-cap stocks have a market cap above $2 billion but below $10 billion.
- Large-cap stocks have a market cap exceeding $10 billion.
Why Should You Consider Buying Small-cap Stocks?
Small-cap stocks offer exciting stories, disruptive technologies and services, portfolio persification, and can deliver above-average growth, but investors must accept higher risks.
Here are a few things to consider when evaluating small-cap stocks:
- Look for www.xmcnglobal.companies with a product or service in a high-growth sector with a disruptive advantage.
- Favour small caps with annualized EPS growth of 25% or more.
- Ensure the current price trades at a discount to the average analyst price target.
- Buy small cap stocks in a separate portfolio and do not mix them with other investments.
What are the Downsides of Small-Cap Stocks?
Investing in small-cap stocks carries greater risks due to unknown factors, shaky balance sheets, and challenging business conditions. After all, there is a reason why small-caps are small-caps. Investors must also accept greater volatility.
Here is a shortlist of small-cap stocks to consider:
- DigitalBridge Group (DBRG)
- Teradata Corporation (TDC)
- Lithium Americas Corporation (LAC)
- Consolidated Water (CWCO)
- Evolv Technologies Holdings (EVLV)
- SES AI Corporation (SES)
- Innodata (INOD)
- Xunlei (XNET)
- Serve Robotics (SERV)
- X Financial (XYF)
Update on My Previous Best Small Cap Stocks to Buy Now
In our previous installment, I highlighted the upside potential of DigitalBridge Group and Teradata Corporation.
DigitalBridge Group (DBRG) - A long position in DBRG between $9.06 and $9.84
DBRG rallied over 33%, and I closed my position at $13.50. While price action corrected into its ascending 38.2% Fibonacci Retracement Level, I am not re-entering this trade.
Teradata Corporation (TDC) - A long position in TDC between $20.15 and $20.97
TDC advanced over 13%, and my stop-loss closed it for a profit at $22.50, just shy of 10%. The correction has brought the price back into my previous buy zone, and I will go for round two.
Evolv Technologies Holdings Fundamental Analysis
Evolv Technologies Holdings provides AI-based, non-invasive, advanced security technologies and security screening solutions. It transforms physical security with advanced, extensible solutions designed for schools, stadiums, transit hubs, and corporate offices.
So, why am I bullish on EVLV after its price doubled since April?
The need for non-invasive AI-based security solutions remains in its infancy, but I expect demand to outstrip supply moving forward. The addressable market for Evolv Technologies Holdings is expanding, which should boost double-digit revenue growth. EVLV reported positive cash flow from operations, gross margins rank among the best in its industry, and the earnings-per-share growth is impressive.
Metric
Value
Verdict
P/E Ratio
Unavailable
Bearish
P/B Ratio
13.93
Bearish
PEG Ratio
Unavailable
Bearish
Current Ratio
0.93
Bearish
Return on Assets
-31.52%
Bearish
Return on Equity
-95.40%
Bearish
Profit Margin
Unavailable
Bearish
ROIC-WACC Ratio
Unavailable
Bearish
Dividend Yield
0.00%
Bearish
Evolv Technologies Holdings Fundamental Analysis Snapshot
The price-to-earnings (P/E) for EVLV is negative. By www.xmcnglobal.comparison, the P/E ratio for the S&P 500 Index is 29.79.
The average analyst price target for Evolv Technologies Holdings is $9.50. It suggests excellent upside potential with manageable downside risks.
Evolv Technologies Holdings Technical Analysis

Evolv Technologies Holdings Price Chart
- The EVLV D1 chart shows price action between its ascending 38.2% and 50.0% Fibonacci Retracement Fan levels.
- It also shows Evolv Technologies Holdings inside a bullish price channel.
- The Bull Bear Power Indicator turned bearish, but near its ascending trendline.
My Call on Evolv Technologies Holdings
I am taking a long position in EVLV between $7.82 and $8.20. I anticipate EVLV to secure more long-term contracts with hospitals and public school systems, while its ongoing advancements and updates should boost client retention rates.
X Financial Fundamental Analysis
X Financial is a Chinese FinTech platform connecting borrowers on its platform with its institutional funding partners. Thanks to its big-data-driven technology, XYF has established numerous strategic partnerships with financial institutions.
So, why am I bullish on XYF despite its pullback?
I like how X Financial uses its technology to facilitate loans to prime borrowers while it deploys robust risk assessment and control systems. The top three shareholders hold 54% of XYF, while its CEO holds a 43% stake, with limited institutional shareholdings. Therefore, buying this FinTech firm means buying the vision of its CEO, who has done a remarkable job to date, as confirmed by operational stats that rank at the top of its industry.
Metric
Value
Verdict
P/E Ratio
2.67
Bullish
P/B Ratio
0.54
Bullish
PEG Ratio
Unavailable
Bearish
Current Ratio
1.59
Bearish
Return on Assets
12.77%
Bullish
Return on Equity
22.63%
Bullish
Profit Margin
23.29%
Bullish
ROIC-WACC Ratio
Positive
Bullish
Dividend Yield
3.54%
Bullish
X Financial Fundamental Analysis Snapshot
The price-to-earnings (P/E) ratio of 2.67 makes XYF an inexpensive stock. By www.xmcnglobal.comparison, the P/E ratio for the S&P 500 Index is 29.79.
The average analyst price target for X Financial is $15.00. It suggests moderate upside potential with decreasing downside risks.
X Financial Technical Analysis 
X Financial Price Chart
- The XYF D1 chart shows price action above its descending Fibonacci Retracement Fan.
- It also shows X Financial entering a massive horizontal support zone.
- The Bull Bear Power Indicator is bearish but remains within its ascending support level.
My Call on X Financial
I am taking a long position in XYF between $11.62 and $13.20. XYF has excellent operational statistics, a deep understanding of its market, creates shareholder value, and pays a good pidend yield, which is rare for a small-cap stock. XYF is one of the most undervalued stocks I have researched this year.
The above content is all about "【XM Market Review】--The Best Small-Cap Stocks to Buy Now", which is carefully www.xmcnglobal.compiled and edited by XM Forex editor. I hope it will be helpful for your trading! Thank you for your support!
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