3 Small-Cap Names That Are Delivering
These names were absolutely on fire Thursday on positive news.
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The market continues on the merry path it has been following almost non-stop since the lows in late October with few interruptions on Thursday. Recent major challenges at another major regional bank this week have proven to be only a minor distraction to investors.
I continue to believe the market is being much too blasé about the problems quickly developing in the commercial real estate sector and vastly underestimating the impacts of "higher for longer" interest rates on the overall economy and banking system.
However, we are going to end the trading week on a happy note and talk about several small-caps I have highlighted before on these pages that absolutely blew up Thursday on positive news.
We will start with Byrna Technologies BYRN . Shares of this non-lethal weapons manufacturer added another 18% to its recent rip-roaring rally Thursday after posting preliminary fiscal first-quarter revenues that surprised to the upside. BYRN shares have now more than doubled so far in 2024 and more than quintupled since their lows in late October.
If you have BYRN in your portfolio, I would be taking at least some profits here as a ton of good news seems already priced into this stock.
CompoSecure CMPO rose 25% Thursday after posting better-than-expected fourth-quarter results. This largest provider of premium metal payment cards posted quarterly numbers that beat both the top and bottom-line consensus estimates.
Net income rose 31% from the same period a year ago and management also provided solid initial sales guidance for 2024 and announced a new $40 million stock repurchase plan. CompoSecure has done a commendable job in cutting its balance sheet leverage in half over the past two years. Even after Thursday's rally, valuations are still quite cheap in this name, and I would hang on to it.
Next is MoneyLion ML , whose stock soared 28% in trading Thursday, as it, too, posted robust quarterly results. The company operates a digital financial platform that provides various products such as checking accounts, cash advances and even online cryptocurrency accounts.
ML stock has now tripled off its low at the recent market trough in early Fall. The company had record adjusted EBITDA in the quarter and should continue to see revenue growth in the low 20s in the year ahead. That said, the firm is still unprofitable (but improving rapidly), so like BYRN, I would probably take a little bit of profit on this rocket given its gains over the past four and a half months.
Please note that due to factors including low market capitalization and/or insufficient public float, we the names mentioned here to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
At the time of publication, Jensen was long BYRN, CMPO and ML.
