Small-cap stocks are inherently far riskier than large-cap stocks. This is due to many factors, but in general, the lower the price of a share, the more vulnerable it is too short selling, sudden dips, spikes, and all-around volatility.
Of course, this also means that smaller stocks have great potential to turn quick and sudden profits for investors. So if you are one who enjoys a risk, then here are two potential small cap stocks which look ripe for picking.
Small Cap Stocks – Axcelis Technologies
With a market cap of $558.37 million, Axcelis Technologies (NASDAQ:ACLS) is a small cap manufacturer of semiconductor chips. Presently, these shares are a victim of the trade war between America and China.
A little over a week ago ACLS plummeted roughly 25% as the entire tech sector was racked by the news of increasing tariffs between the two superpowers.
But the dip may offer a good time to buy once investors keep in mind that the Trade War isn’t likely to end soon and, as such, these shares are at risk until it does. But the long-term benefit here is palpable; Axcelis shows strong performance thanks to a product called Purion which is in high demand. In recent years, several top chipmakers have placed multiple orders for Purion systems and the company enjoys consistent business off the back of this.
Small Cap Stocks – Model N
Another technology company, America’s Model N (NYSE:MODN) is seeing an increased performance for the entire month of May. Shares are currently selling for $18.99 and have packed on gains of 6.5% already in the month.
With a market cap of $616 million, Model N is a revenue management company for life sciences and technology companies.
According to Rocklandregister.com, these small-cap stocks have an average rating of “Buy” and a consensus price target of $21.88 USD. From current prices, that represents a potential increase of 15%.
Earlier in May, the software maker beat analysts expectations in its quarterly earnings report.
It showed: “$0.01 EPS for the quarter, beating the Zacks’ consensus estimate of ($0.19) by $0.20. The business had revenue of $34.84 million for the quarter, compared to analysts’ expectations of $34.52 million.”
However, the firm’s revenue was down 11.2% on a year-over-year basis.
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