The small-cap market is unearthing some shares at present that could return for investors in the not too distant future. The recent downturn has hit some stocks hard, but this isn’t something that should scare investors. Rather, now is the time to eye potential while these small-cap stocks are down.
Nobody can tell you a sure bet, but we can definitely unearth two small-cap stocks worthy of being watched right now.
Small-Cap Stocks to Watch: PetMed Express (NASDAQ:PETS)
Who doesn’t love their pet? The petcare sector has a certain buzz that was palpable in recent years. Though we’re not talking about it as much, the market itself has not died down. In fact, Grand View Research estimates that the global pet-care market, which was worth $131.7 billion in 2016, will expedite growth to $202.6 billion by 2025.
This is why seasoned petcare company PetMed Express is on the radar right now. The company was founded in 1996 and shares went public by 1999. The company has capitalized on the online petcare pharmacy market and established itself as a leading name.
However, jump forward to this year and shares have performed poorly, losing 26% approximately year-to-date. But for $17.22 USD at present, the company’s growing sales and earnings make these shares a potential investment win.
Further, InvestorPlace says, “the stock’s trading at a modest forward-looking P/E of 10.87.” There is turnaround potential here.
Small-Cap Stocks to Watch: Innoviva (NASDAQ:INVA)
Innoviva is a less risky biotechnology sector play. This could be because it works hand-in-hand with pharma giant GlaxoSmithKline (NYSE:GSK). This brings a sense of assuredness for investors. The pair have a tight relationship making and marketing inhaled drugs such as Anoro and Relvar/Breo.
These drugs are delivered to patients via Innoviva’s Ellipta device. Herein lies a lucrative royalty stream for Innoviva. Approximated at 5–10%, this adds up as sales are growing fast. Recently, SimplyWallStreet ran an analysis on the company:
“Innoviva’s EPS shot from US$1.40 to US$3.95, over the last year. Year on year growth of 183% is certainly a sight to behold.”
Further, Innoviva’s position means it does not incur any R&D costs; this offers investors high-margin, low-risk revenue.
Have you any small-cap stocks on your radar?
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