5 Under-the-Radar Small-Cap Stocks to Buy Now
Sometimes the stocks that hold the biggest opportunities aren’t the ones plastered all over the news.
Wall Street has an agenda that ropes in everyone from the financial media to billionaire hedge fund managers. It wants to make money. Often, it does this by manipulating narratives surrounding its largest positions – touting massive companies like The Walt Disney Co. (NYSE:DIS) and Alphabet Inc. (Nasdaq:GOOG) as “screaming” buys so your investment drives up the value of theirs.
But the truth is: For small-account investors, dropping $2K per share on a stock will not yield the kinds of gains the financial media claims. They can be a great starting place to build wealth – but knock-your-socks-off profits? That’s unlikely.
Turning your sights to the little guys, the under-the-radar powerhouses, is one of the smartest things you can do for your money. Solid small caps and even micro caps have only one direction to go, and that’s up.
Today, I’ve picked out five of my favorite small-cap companies that I suggest you buy today. Each is chock-full of profit potential yet cost $10 or less per share.
#1: Medalist Diversified REIT Inc. (Nasdaq:MDRR)
This is a very small real estate investment trust (REIT) that owns a handful of properties in the southeastern United States.
Its holdings include grocery store-anchored shopping centers, industrial properties, hotels, and retail centers. The company weathered the pandemic, and business conditions have improved enough to allow it to renew its dividend (which is currently a 7.7% yield) and announce a stock buyback program of up to 500,000 shares.
It has been turning over the portfolio in the last year to increase cash flow. Medalist’s one hotel property is 100% leased by Clemson University, so it is not experiencing the same pandemic-related pressures many hotels have been experiencing.
The stock is trading well below the value of its properties – shares are close to a dollar each as I am writing this – and I won’t be shocked if it gets a takeover offer from a larger REIT at some point in the future.
#2: SG Blocks Inc. (Nasdaq:SGBX)
SGBX is one of the more exciting companies on this list.
It makes code-engineered cargo shipping containers for safe and sustainable construction – turning containers into housing for commercial, residential, and military markets. It also partners with Blink Charging Co. (Nasdaq:BLNK), an electric vehicle (EV) company I have recommended to my readers in the past, to turn shipping containers into charging stations for EVs. Each station will offer EV drivers access to eight of Blink’s IQ 200 fast chargers.
This is an idea with massive potential. The containers can be used to construct an incredibly wide range of projects – including single and multifamily housing. There is a massive tailwind for this company from the housing shortage in the United States.
But housing isn’t the end of its product’s potential. These containers can be used to create cheap office space, retail stores, student housing, lab space, and quick-serve restaurants. Over the past two years, we have seen numerous collecting stations for COVID-19 tests constructed using containers like these all around the United States.
SG Blocks has several developments underway across the United States, and I expect to see more of these fast-built, low-cost housing projects in the future.
#3: Pitney Bowes Inc. (NYSE:PBI)
If you are of a certain age, you remember when every business had a Pitney Bowes postage meter in the office. It was a lot easier to use the meter than constantly running to the post office for stamps and dropping off packages. Pitney Bowes has dominated the postage meter market for decades – and still does.
Today, however, there is much more to Pitney Bowes than postage meters. The company has developed into a full-fledged e-commerce company that helps businesses fulfill e-commerce orders worldwide. It uses artificial intelligence to constantly refine the fulfillment and delivery process so that customers can remain competitive in a world where e-commerce is growing exponentially.
PBI owns a bank that allows it to provide financial services to its customers as well. It just announced that it worked with Fiserv Inc. (Nasdaq:FISV) to roll out a new tech platform that improves the quality of PBI’s services to small and mid-sized business clients across the United States. The new platform will enable the bank to provide shipment financing and payment services, improving its clients’ chances in a rapidly changing economy.
#4: Zedge Inc. (NYSE:ZDGE)
This is a leading digital publishing and content company with more than 43 million active monthly users, and its apps have been installed over 400 million times around the world. It provides smartphone customization tools for its customers. These include things like wallpapers, ringtones, and emojis.
It also offers Zedge Premium, a marketplace that artists, celebrities, and emerging creators can use to market and sell their digital content to the millions of users on Zedge’s apps.
In December, Zedge announced they were now offering its creators the ability to create and sell non-fungible tokens (NFTs) in the Zedge Premium marketplace. The market for NFTs has been red hot over the last year, with some offerings from celebrities selling for millions of dollars. NFT creators can self-publish, mint, and sell NFTs at the push of a button.
The Zedge NFT platform is also a lot easier for consumers because it is currency agnostic. You do not have to open a cryptocurrency account to buy NFTs on the Zedge platform.
Despite the massive opportunity from entering the NFT markets, shares of Zedge are trading at just 10 times earnings right now. If it were trading in line with its competitors, shares of Zedge would be changing hands at four to five times the current stock price. The company’s fundamentals are fantastic, and if you can pick up shares for less than $5, you should.
#5: Park City Group Inc. (Nasdaq:PCYG)
Park City Group makes supply chain management software for retailers – primarily, food retailers. As the Food and Drug Administration rolls out increasingly complex food industry regulations, like the upcoming food traceability rules, this company steps up to the plate.
Many of the largest food retailers in the world – including Walmart Inc. (NYSE:WMT), Target Corp. (NYSE:TGT), and Costco Wholesale Corp. (Nasdaq:COST) – use Park City software to manage their supply chain and inventory. Three out of every five grocery stores in the United States are Park City customers.
In addition, its services are mainly subscription based. As a result, 98% of PCYG’s business is recurring revenue – and it has a 95% retention rate.
This company has outstanding financials with a strong balance sheet and growing subscriber base. I would strongly consider buying it here and riding the stock to new highs.