One of the best parts of investing is finding the hidden gems that have massive potential. These types of opportunities are often found in small cap stocks that have yet to be discovered. In this article, I’m going to cover my best small cap stocks to buy going into 2022.
Small cap stocks are companies with a market cap between $300 million – $2 billion. Furthermore, these assets are typically more volatile than larger, more established businesses.
While that may be true, you also have the chance to get in on the ground floor of high-growth opportunities.
Let’s take a look at the best small cap stocks to buy for next year. The 5 Best Small Cap Stocks to Buy Now All of your favorite brands started somewhere, most as small cap stocks. Consumer favorites like Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Tesla (NASDAQ: TSLA) all started as small companies and grew their way to the top.
With that being said, these are some of the best small cap stocks to buy as they are fighting to grow their name and deliver on results. #5 Purple Innovation (NASDAQ: PRPL)
Market Cap : 1.32B
EPS : -2.56
YOY Revenue Growth : 10.6%
First on our list of the best small caps to buy is Purple. Many people know Purple Innovations from the commercials promoting superior mattress comfort & technology. The company offers premium comfort products such as: Mattresses
Pillows
Cushions
Frames
And sheets
However, Purple is not immune to supply chain issues, which limited its ability to meet demand in Q2. With that being said, the company still increased its wholesale unit by 233% YOY as retail stores are opening back up.
Joe Megibow, CEO, said we are “progressing towards our long term targets of $2 billion to $2.5 billion in annual net revenue… over the next three to five years.”
However, Purple’s biggest threat is the competition creeping into the market. For example, companies like Casper Sleep (NYSE: CSPR) and Sleep Number (SNBR) have comparable products. Not to mention large retailers like Walmart and Amazon offer discounted alternatives.
With Purple’s stock down 52% from its yearly high, will the company overcome the competition? If consumers catch onto the superior technology, Purple has a big market ahead. But, if competitors take a larger market share, it could spell more trouble for PRPL stock. #4 Tupperware Brands (NYSE: TUP)
Market Cap : 1.11B
EPS : 2.53 YOY Revenue Growth : 17% For all you value investors out there, here’s a company for you. Everyone’s favorite kitchen storage solutions maker is also one of the best small cap stocks to buy now.Tupperware is amid a “business turnaround,” investing in new strategies and talent across the board. In fact, the plan is starting to pay off as sales are growing and the company is paying off its debt.The company posted second-quarter sales of $464.7 million, with net income reaching $35.6 million.Tupperware stock is down 40% since the beginning of the year. But, if you zoom out, it’s down over 76% from its all-time high set in 2013.If management can successfully turn the company around, Tupperware stock has a chance to rebound. #3 Carparts.com (NASDAQ: PRTS) Market Cap : 780M EPS : -0.06 YOY Revenue Growth : 32% Carparts.com’s business is fairly self-explanatory –they sell car parts through its digital platform. The supplier was established in 1995 and has grown into a leader in its industry.Despite the limitations in the industry’s supply chain, the company is thriving and shattering sales records. Carparts.com reported YOY revenue growth for the sixth consecutive quarter in its Q2 earnings . In addition, it earned $2.1 million in net profits.Not only that, but Carparts.com is expanding its capacity, allowing for more inventory. The growth is a good sign for the company as it navigates uncharted territory.On top of this, Carparts.com was just added to the Russell 2000 in 2020 as the company continues to improve.A major advantage could be coming for the supplier as the FTC is looking into dishonest practices by manufacturers. The agency claims repairs may be limiting and impacting consumer rights. If they find this to be true, Carparts.com could see a big boost.As a result of the growth, Carparts.com stock is up over 900% in the past two years. But, as the company continues expanding, it’s focused on delivering results to shareholders. #2 AppHarvest (NASDAQ: APPH) Market Cap : 524M EPS : -1.97 YOY Revenue Growth : N/A Next on our list of best small cap stocks to buy – a […]
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