Top 5 Small Cap Stocks You Must Watch in 2023

small cap stocks

While the world eagerly follows the trail of renowned corporations and tech giants, there lies a hidden realm of smaller, budding organizations brimming with untapped potential. Most investors unwittingly pass by these hidden gems, oblivious to the extraordinary growth and investment opportunities such small cap stocks provide.

Small cap stocks refer to the shares of companies with relatively small market capitalization. Typically, when a company’s market cap falls within the scale of $300 million to $2 billion, it earns the label of a small cap. 

These relatively small-sized players in the stock market offer a distinct blend of risks and rewards, quite unlike their larger counterparts. To put it plainly, although small-caps are often home to budding enterprises brimming with boundless growth potential, their stature also renders them inherently less steady than their more seasoned peers. Consequently, these small cap organizations could either skyrocket to become the next major sensation or fall on the precipice of financial ruin; you never know. 

With that said, it is essential to conduct thorough research in order to spot the high-potential small cap stocks among thousands of options. In this article, we have assembled a list of 5 promising small cap stocks that integrate impressive growth prospects in 2023 and beyond. 

1. Frontline Plc (FRO)

Based in Cyprus, Frontline PLC is a prominent maritime enterprise specializing in the global conveyance of unrefined petroleum and its derivatives across oceans. It possesses and oversees an extensive array of tankers designed for transporting both crude oil and various oil-based commodities. 

Notably, since 2008, the company has owned one of the most expansive tanker fleets worldwide, encompassing Very Large Crude Carriers (VLCC), Suezmax carriers, and Suezmax OBO carriers.

According to the latest statistics, Frontline Plc has a total market capitalization nearing $3 billion, falling into the category of small-cap to lower mid-cap companies. Its valuation measures demonstrate a trailing P/E ratio of 6.8, while the trailing P/S ratio stands at 2.28. Moreover, the enterprise has reported a notable $1.43 billion in revenue over the last 12 months amid a quarterly revenue growth rate of 149%. 

Ultimately, FRO is one of the most prominent small cap stocks that incorporates the potential to exceptionally grow over the coming period. At the time of writing, the FRO stock has registered 28.23% returns year-to-date.

2. CarParts (PRTS)

Previously known as US Auto Parts Network, Inc., CarParts is an esteemed California-based online retailer that specializes in offering a vast array of aftermarket auto parts in the US and the Philippines. 

Catering to the needs of individual consumers, the company delivers a wide range of replacement parts for various facets of an automobile. From exterior components to engine essentials, as well as an extensive selection of performance parts and accessories, consumers can shop all kinds of auto parts from the company’s e-commerce websites and online marketplaces. 

With a semiconductor shortage impacting the automobile industry and stirring a price surge for both new and pre-owned vehicles, CarParts appears poised to thrive further. By setting its sights on a remarkable 20%-25% revenue in the foreseeable future, the company’s trajectory indicates that it is setting the stage for its upcoming expansion.

PRTS is a prominent high-potential value stock that may deliver reliable returns over the coming years. According to recent data, the enterprise has a market capitalization of over $255 million and records nearly 56 million shares outstanding. Moreover, the establishment’s income statement stipulates a trailing twelve-month gross profit of $230 million and revenue of $641 million. 

3. Arcellx Inc. (ACLX)

Arcellx Inc. is a US-based biotechnology company that was founded in 2014 with the objective of enhancing adaptability and control to the prospects of cell therapy. With a strong emphasis on adaptive immune cell therapies, the company offers cancer patients a game-changing approach that positions cells to be easily silenced, activated, and reprogrammed throughout their battle against the disease. At Arcellx, the professionals strive to serve patients around the globe with innovative solutions that truly make a difference.

In May 2022, Arcellx Inc took a significant leap forward as they administered the very first dose of ACLX-001, a ground-breaking therapeutic from their incredible ARC-SparX platform, to evaluate its potential in tackling the challenging condition of relapsed or refractory multiple myeloma. This milestone marks a promising step towards advancing treatment options for patients battling this complex disease.

Arcellx Inc (ACLX) shares have demonstrated an impressive surge in their price over the past year, boasting a remarkable 368.18% gain. This exceptional performance has caught the attention of Wall Street analysts, who have termed it as one of the most upbeat small cap stocks while giving it an average rating of “Strong Buy.”

As per the recent reports, the company boasts a market capitalization of $2.2 billion and a trailing twelve months revenue of $17.9 million.

4. Altisource Asset Management Corporation (AAMC)

Altisource Asset Management Corporation is an innovative lending entity that caters to marginalized markets by furnishing them with funds and resources.

Additionally, it specializes in overseeing investment portfolios and offering corporate governance services to esteemed investors. Operating under an asset management accord, the company extends its offerings to Altisource Residential Corporation, an organization dedicated to procuring and managing residential properties suitable for families from the laboring class. 

Moreover, Altisource Asset Management Corp. has established an Alternative Lending Group (ALG) to actively pursue opportunities associated with Crypto ATMs. It primarily conducts its operations in the United States and India through its subsidiaries, namely AAMC US, Inc. and Finsight Business Solutions Private Limited.

AAMC stands among the list of most renowned small cap stocks while also leading the Asset Management industry with an impressive 66 rating, as bestowed by InvestorsObserver. 

This stellar rating not only places AAMC among the industry’s elite but also positions this stock above a whopping 99 percent of other stocks within the Asset Management sector. What’s more, AAMC’s overall rating of 66 signifies its superiority over 66% of stocks across all industries, making it a shining star in the investment universe. As of now, the stock has registered over 650% in returns over the last 12 months

5. Viking Therapeutics Inc. (VKTX) 

Viking Therapeutics is another biotechnology company that harnesses its deep understanding of metabolism to drive advancements in medical research as well as create transformative treatments that enhance the well-being of patients. 

At the forefront of their pioneering efforts stands VK2809, an easily ingested medication currently undergoing Phase IIb clinical trials. This innovative remedy targets individuals diagnosed with biopsy-proven non-alcoholic steatohepatitis and NAFLD, holding immense promise for their recovery.

Additionally, Viking Inc. is actively involved in the development of VK5211, a remarkable solution dedicated to aiding patients in their recuperation following non-elective hip fracture surgery. Moreover, the company is also advancing VK0612, an orally administered drug candidate on the brink of entering Phase IIb. With its sights set on combating type 2 diabetes, this cutting-edge treatment represents a beacon of hope for individuals affected by this pervasive condition.

These are just a few examples of Viking Inc.’s dynamic portfolio, which encompasses various other competitive initiatives. Through their unwavering commitment to innovation and patient prosperity, Viking continues to forge new paths in the realm of therapeutic development.

VKTX is one of the most promising small cap stocks that has exhibited a growth of more than 164 YTD. The company has a total market capitalization of almost $2 billion, with nearly 100 million shares outstanding. 

Disclaimer: The insights shared in this article are intended solely for informative purposes and must not be regarded as authoritative financial advice. Engaging in investment activities entails inherent uncertainties, and previous results do not guarantee future returns.

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