Small-cap stocks are often overlooked yet they can provide investors with significant potential for outperformance. That said, not all small-cap stocks are worth considering. It’s worth noting that most small-cap companies are unprofitable and carry substantial risks.
But there exists a unique class of small-cap stocks that could be huge wealth generators. When carefully considering the best small-cap stocks to buy, profitability should be a key driver. Additionally, investors should only invest what they can afford to potentially lose. With the iShares Russell 2000 ETF (NYSE:IWM) on the move, 2024 could spell huge returns for small-cap stocks.
Now, let’s discuss the 3 best small-cap stocks to buy today.
Axcelis Technologies (ACLS)
Axcelis Technologies (NASDAQ:ACLS) is a leading provider of ion implantation equipment for the semiconductor industry. And over the last 3 years, the company has exhibited robust financial performance.
In addition to Axcelis’s revenue and EPS skyrocketing over the last several years, the growth is expected to continue. In particular, the growth of their Purion implantation platform continues to be supported by industry fundamentals. This includes the rapid deployment of artificial intelligence (AI), language-learning models (LLMs), and the electrification of the automotive industry.
But these are just a few reasons why the company expects growth to remain strong going forward. In Q3 2023, Axcelis’s revenue grew 28% year-over-year (YOY) to $293.3 billion. Additionally, net income increased 64% YOY to 65.93 million, or $1.99 per share. CEO Russell Low is bullish on the Purion platform’s and the long term tailwinds of the silicon carbide market.
With the Purion platform seeing high double-digit growth, Axcelis is one of the top small-cap stocks to buy.
Crispr Therapeutics AG (CRSP)
Crispr Therapeutics AG (NASDAQ:CRSP) is a compelling small-cap stock to buy due to its ground-breaking work in gene editing. Over the years, gene editing has been an incredibly speculative investment idea due to the nascency of the industry. However, now it looks like all the research & development is starting to pay off.
The company has been at the forefront of developing CRISPR/Cas9 technology for therapeutic applications. On Dec. 8, the FDA approved Casgevy, the first-ever cell-based gene therapy for Sickle Cell disease. This novel treatment was in collaboration with pharmaceutical giant, Vertex Pharmaceuticals (NASDAQ:VRTX).
The approval of the first-ever gene therapy by the FDA is not only a huge milestone for Crispr but also for the gene therapy industry. Crispr also has other novel treatments in its pipeline, suggesting that they don’t plan to be a one-trick pony.
Sigma Lithium Corp (SGML)
Sigma Lithium Corp (NASDAQ:SGML) is a leading lithium mining company at the forefront of the electric vehicle (EV) revolution. The company has reached a critical point, signaling that they are positioned to generate significant FCF from their Grota do Cirilo mine.
Sigma Lithium has positioned itself as one of the world’s leading publicly traded Lithium mining companies. What separates the company from its counterparts is its sustainable mining practices. Their mine in Brazil’s Minas Gerais State is 100% green-powered, making it a must safer bet for institutional holders appealing to ESG investing guidelines.
However, the company has reached a key inflection point, with profitability being a major tailwind. In their latest quarterly results, Sigma saw a positive adjusted EBITDA of $54.6 million. Additionally, they announced positive results for their Phase 4 & 5 programs, suggesting their lithium output could reach 130 Mt.
If you’re bullish on the growth of the EV industry, Sigma is a top small-cap stock to buy.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
